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CS Professional · Compliance Management, Audit and Due Diligence · Secretarial Audit

Kaveri Agro Pvt Ltd is an unlisted private company. Its management asks whether section 204 itself makes secretarial audit compulsory for every company. Which statement is correct as per the section?

Section 204 does not apply to every company. It covers every listed company and companies belonging to other classes as may be prescribed. An unlisted private company needs the audit only if it falls within a prescribed class.

  1. AYes, section 204 applies to every company registered under the Act
  2. BNo, section 204 applies to listed companies and to companies in other classes as may be prescribedCorrect
  3. CNo, section 204 applies only to public companies with a company secretary on the Board
  4. DYes, but only if the company has more than one director

Explanation

Section 204(1) covers every listed company and a company belonging to other class of companies as may be prescribed. An unlisted private company is covered only if it falls within a prescribed class. Hence it is not universal.

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