Compliance check, often conducted through secretarial audit, is a process that ensures a company is adhering to the legal and regulatory requirements applicable to its operations. Here's a comprehensive overview:

1. **Purpose**: The primary purpose of compliance check or secretarial audit is to verify whether a company is complying with the provisions of various laws, regulations, and guidelines relevant to its business activities. This includes corporate laws, securities laws, labor laws, taxation laws, environmental laws, and other applicable regulations.

2. **Legal Requirement**: In many jurisdictions, companies are required by law to conduct secretarial audit or compliance check at regular intervals. For example, in India, certain classes of companies are required to undergo a mandatory secretarial audit conducted by a qualified company secretary.

3. **Scope**: The scope of compliance check or secretarial audit typically includes a review of the company's corporate governance practices, internal control mechanisms, statutory records and registers, filings with regulatory authorities, contracts and agreements, board and shareholder resolutions, and other relevant documents and records.

4. **Key Areas**: Compliance check or secretarial audit covers various key areas, including:
   - Corporate Governance: Review of board composition, board meetings, committees, disclosure practices, etc.
   - Statutory Compliance: Verification of compliance with company law provisions, filing of annual returns, maintenance of statutory registers, etc.
   - Securities Laws Compliance: Compliance with listing requirements, insider trading regulations, disclosure norms, etc.
   - Labor Laws Compliance: Adherence to employment laws, industrial relations norms, health and safety regulations, etc.
   - Taxation Compliance: Compliance with income tax, goods and services tax (GST), withholding tax, transfer pricing, etc.
   - Environmental Compliance: Compliance with environmental regulations, pollution control norms, waste management rules, etc.
   - Contractual Compliance: Review of contracts, agreements, and obligations to ensure compliance with legal requirements and contractual terms.

5. **Process**: The process of compliance check or secretarial audit typically involves the following steps:
   - Planning: Identification of key areas to be reviewed, preparation of audit plan, and allocation of resources.
   - Review: Examination of relevant documents, records, and processes to assess compliance levels.
   - Analysis: Evaluation of findings, identification of non-compliance issues, and assessment of their significance and implications.
   - Reporting: Preparation of audit report highlighting the findings, observations, recommendations, and suggested remedial actions.
   - Follow-up: Monitoring of implementation of remedial actions and periodic follow-up to ensure ongoing compliance.

6. **Benefits**: Compliance check or secretarial audit offers several benefits to companies, including:
   - Identifying and mitigating compliance risks.
   - Enhancing corporate governance practices.
   - Improving transparency and accountability.
   - Building trust and credibility with stakeholders.
   - Avoiding legal liabilities, penalties, and reputational damage.

7. **Challenges**: Compliance check or secretarial audit may face challenges such as:
   - Complexity of legal and regulatory requirements.
   - Lack of awareness or understanding of compliance obligations.
   - Inadequate systems and processes for monitoring and ensuring compliance.
   - Resource constraints and budgetary limitations.

Overall, compliance check or secretarial audit is a critical process that helps companies ensure adherence to legal and regulatory requirements, mitigate risks, and enhance corporate governance practices. It requires careful planning, diligent execution, and ongoing monitoring to achieve its objectives effectively.

Compliance Check - Secretarial Audit Fees