CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit
Which statement correctly distinguishes section 204 from section 205 of the Companies Act, 2013?
Section 204 requires a secretarial audit report for listed and prescribed companies, while section 205 lists the functions of the company secretary, such as reporting compliance to the Board. Section 205(2) adds that neither section affects the duties of the Board or its officers.
- ASection 204 deals with the functions of the company secretary, and section 205 with secretarial audit of bigger companies
- BSection 204 requires secretarial audit for listed and prescribed companies, while section 205 sets out the functions of the company secretary, including reporting compliance to the BoardCorrect
- CBoth sections apply only to unlisted private companies
- DSection 205 replaces the duties of the Board and the managing director regarding compliance
Explanation
Section 204 is about secretarial audit for bigger companies, while section 205 lists functions of the company secretary such as reporting compliance to the Board and ensuring compliance with secretarial standards. Section 205(2) states these sections do not affect the duties of the Board, chairperson, managing director or whole-time director.
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