Module: | Specialized Audits, Tech & ESG Disclosures
Q87: Consider the following statements regarding the certification of the Annual Return (Form MGT-8) by a Practicing Company Secretary (PCS):
1. A listed company is mandatorily required to have its Annual Return certified by a Practicing Company Secretary.
2. An unlisted public company or a private company having a paid-up share capital of Rupees 10 Crore or more, or turnover of Rupees 50 Crore or more, must also obtain this certification.
3. The PCS certifying the Annual Return must explicitly state whether the company has complied with the provisions of the Companies Act, declaring any specific non-compliances found.
Which of the above statements is/are correct?
2. An unlisted public company or a private company having a paid-up share capital of Rupees 10 Crore or more, or turnover of Rupees 50 Crore or more, must also obtain this certification.
3. The PCS certifying the Annual Return must explicitly state whether the company has complied with the provisions of the Companies Act, declaring any specific non-compliances found.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
D. All statements 1, 2, and 3 are correct.Structural Breakdown: Statement 1 is correct; all listed companies must undergo this certification.
Statement 2 is correct; the threshold for unlisted companies is strictly Rs 10 Crore paid-up capital OR Rs 50 Crore turnover.
Statement 3 is correct; the MGT-8 format requires the PCS to list out any procedural defaults, such as failing to hold board meetings on time or illegal related-party loans.
Historical/Related Context: The certification acts as a "legal audit" parallel to the "financial audit." It was introduced because financial auditors (CAs) primarily focused on numbers, often ignoring severe procedural violations of corporate law by promoters, which eventually led to governance collapses.
Causal Reasoning: By forcing an external Company Secretary to sign off on the Annual Return under penalty of law, the MCA ensures that large private enterprises maintain strict statutory registers and board meeting protocols, rather than treating them as mere paperwork to be backdated at year-end.