By CS Sapna Malpani, Practising Company Secretary, Bangalore | Last updated: 5 August 2026
A private company in Bengaluru held four board meetings last year, passed every resolution properly, and still walked into a qualified secretarial audit report. The reason was not the decisions. It was the paperwork around them. Draft minutes went out 40 days after the meeting instead of 15, one meeting notice skipped the agenda, and nobody signed the minutes book within the window. Each slip breaks a Secretarial Standard. Under Section 118(11) of the Companies Act, 2013 it is a ₹25,000 penalty on the company and ₹5,000 on every officer in default. The secretarial standards SS-1 SS-2 framework is where most private companies quietly lose compliance marks, and since 1 April 2024 the rules bite harder than ever.
- What: SS-1 (Board Meetings) and SS-2 (General Meetings) are mandatory under Section 118(10). Revised versions apply from 1 April 2024.
- Who must comply: Every company incorporated in India, except a single-director OPC. Private companies no longer get their carve-outs if they have defaulted on ROC filings.
- Penalty: ₹25,000 on the company + ₹5,000 on each officer in default under Section 118(11), plus a qualification in your Secretarial Audit Report.
- Key action: Circulate draft minutes within 15 days, record and sign minutes within 30 days, issue notices with full agenda and notes.
- Time to act: Now, because the standard applies to every meeting you hold this financial year.
The problem: good decisions, bad records
Secretarial Standards are the rulebook the Institute of Company Secretaries of India (ICSI) writes for how meetings are called, conducted, and minuted. Section 118(10) of the Companies Act, 2013 makes observance of these standards compulsory, not optional guidance. SS-1 governs meetings of the Board of Directors and its committees. SS-2 governs general meetings, meaning your AGM and any EGM.
Most founders assume that if the decision was correct, the record is a formality. That assumption is where the money leaks. A secretarial audit under Section 204, an internal audit, a due-diligence review before a funding round, or a bank sanction check all read the minutes book first. When the auditor finds that notices went out late, that the attendance and dissent were not recorded, or that minutes were signed months after the meeting, it goes into the report as a non-compliance. For a company preparing to raise capital, a governance qualification on the file is the kind of red flag investors ask hard questions about.
The penalty itself is fixed. Section 118(11) reads: default in complying with Section 118 attracts a penalty of ₹25,000 on the company and ₹5,000 on every officer in default. Repeat the lapse across board meetings, committee meetings, and the AGM in a single year and the officer-level exposure stacks up fast.
Diagram 1, The SS-1 board meeting timeline you must hit
Overlay under Section 173: a company must hold at least 4 board meetings a year, with no gap of more than 120 days between two consecutive meetings.
What changed on 1 April 2024
ICSI revised both standards and, with the Central Government’s approval, brought the new versions into force from 1 April 2024. The revision aligned the standards with amendments to the Companies Act and its rules. The single change that hurts private companies the most concerns exemptions.
Earlier, private companies enjoyed relaxations on parts of SS-1 and SS-2, such as shorter notice by consent and simpler procedures. From 1 April 2024, those relaxations come with a condition. In the words of the revised applicability clause, the exemptions apply only if the company has “not committed any default in filing” its financial statements or annual return. Default on your AOC-4 or MGT-7, and the carve-outs disappear. The same condition now applies to not-for-profit (Section 8) companies and government companies.
The practical effect is a compounding trap. A company that misses an ROC deadline is already exposed to late fees and additional fees under Sections 137 and 92. From April 2024, that same default also strips its Secretarial Standard exemptions, so the full standard applies to every meeting until the filing is regularised. One missed filing now widens into a governance gap across the whole meeting calendar.
| Requirement | Before revision | From 1 April 2024 onwards |
|---|---|---|
| Private company exemptions | Available unconditionally | Only if no default in filing financial statements or annual return |
| Draft minutes circulation | Practice varied | Within 15 days of the meeting to all directors |
| Section 8 & government companies | Broad relaxations | Same default-linked condition applies |
| Recording of minutes | 30 days | 30 days from conclusion of meeting (unchanged, strictly checked) |
Diagram 2, Secretarial Standards by the numbers
What you must do now: the SS-1 and SS-2 checklist
Work through this list before your next board meeting and AGM. It maps each step to the standard and to the Companies Act section behind it.
- Issue notice at least 7 days ahead. Under SS-1, notice of a board meeting goes to every director at their registered address by hand, post, or electronic means. Shorter notice is allowed only in limited circumstances and, for a defaulting private company, the exemption route may no longer be open.
- Attach the agenda and agenda notes. A bare notice is a common audit finding. SS-1 expects the agenda and supporting notes with the notice so directors can apply their mind before the meeting.
- Confirm the quorum before you start. For a board meeting the quorum is one-third of total strength or two directors, whichever is higher. Record the presence, and note any director joining by video with the statutory declarations.
- Hold at least 4 board meetings, gap not over 120 days. This is Section 173 read with SS-1. A small company or an OPC with one director sits under a lighter regime, but an ordinary private company must meet the four-meeting rule.
- Circulate draft minutes within 15 days. Send draft minutes to all directors within 15 days of the meeting for their comments. Keep proof of circulation; auditors ask for it.
- Enter and sign minutes within 30 days. Final minutes must be entered in the minutes book within 30 days of the meeting and signed by the chairman. Minutes must record attendance, the fair summary of discussion, the resolution, and any dissent.
- For the AGM, give 21 clear days notice. SS-2 with Section 101 requires 21 clear days written notice, the explanatory statement for special business under Section 102, and proper e-voting arrangements where applicable.
- Maintain the attendance register and proxies. SS-2 expects an attendance record for general meetings and correct handling of proxies received up to 48 hours before the meeting.
- File resolutions in MGT-14 where required. Certain board and special resolutions go to the Registrar in Form MGT-14 under Section 117 within 30 days. A clean minutes book makes this filing straightforward.
- Clear any ROC default first. If your AOC-4 or MGT-7 is pending, regularise it. Until then, the revised standards treat your private company as one without exemptions, and the full procedure applies to every meeting.
Diagram 3, SS-1 vs SS-2 at a glance
| Feature | SS-1 (Board Meetings) | SS-2 (General Meetings) |
|---|---|---|
| Governs | Board and committee meetings | AGM and EGM |
| Notice period | At least 7 days | 21 clear days |
| Quorum | 1/3 of total or 2 directors, higher of the two | As per Section 103 (members present) |
| Minutes recorded | Within 30 days | Within 30 days |
| Single-director OPC | Exempt from Section 118 | Exempt from Section 118 |
| Penalty on default | ₹25,000 company + ₹5,000 per officer in default (Section 118(11)) | |
The deeper implication for private companies
According to CS Sapna Malpani, the 2024 revision changed the character of Secretarial Standards from a paperwork discipline into a compliance dependency. A company that files its returns on time keeps its private-company comforts. A company that slips even once loses them across the board until it regularises. That link between filing discipline and meeting procedure is the point directors miss, because the two functions usually sit with different people. The accountant handles ROC filings, while the founder runs the board.
The forward view: as MCA continues to push companies toward clean annual filings, expect secretarial auditors and diligence teams to treat the minutes book as a proxy for overall governance health. A company that maintains its SS-1 and SS-2 records cleanly signals that its board actually functions. For a startup heading into a Series A or a company eyeing a listing, that signal is worth far more than the ₹30,000 penalty it avoids. The registers you keep this year are read by the investors you court next year.
Related provisions people confuse
Founders often mix up the standards with the underlying sections. SS-1 and SS-2 sit on top of the Companies Act; they do not replace it. Section 118 makes minutes and standards mandatory. Section 173 sets the four-meeting board calendar. Sections 101 to 103 govern general meeting notice and quorum. Section 117 with Form MGT-14 governs filing of resolutions. A separate confusion is with the Secretarial Audit under Section 204. That audit checks whether you followed SS-1 and SS-2, but it is a different obligation that applies to larger and listed companies. Getting the standards right is what keeps the Section 204 report clean.
- ✅ SS-1 and SS-2 are mandatory under Section 118(10), not best-practice guidance.
- ✅ Default attracts ₹25,000 on the company and ₹5,000 on every officer under Section 118(11).
- ✅ From 1 April 2024, private company exemptions vanish if you defaulted on financial statement or annual return filing.
- ✅ Circulate draft minutes within 15 days; record and sign final minutes within 30 days.
- ✅ Hold at least 4 board meetings a year with no gap over 120 days (Section 173).
- ✅ Give 21 clear days notice for the AGM under SS-2 with Section 101.
- ✅ A single-director OPC is exempt from Section 118; an OPC with more than one director is not.
- ✅ Clear pending ROC filings first, because they are now the gatekeeper to your exemptions.
Sources and references
- Section 118, Companies Act, 2013: Minutes of proceedings and observance of Secretarial Standards (CAIRR)
- ICSI: Secretarial Standards Board (SS-1 and SS-2)
- ICSI: Guidance Note on Meetings of the Board of Directors (Revised SS-1)
- ICSI: Secretarial Standard on General Meetings (SS-2)
- TaxGuru: Key Changes to Secretarial Standards (SS-2) on General Meetings
- Lexology: Decoding the Updated Secretarial Standards
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Frequently asked questions
Are Secretarial Standards SS-1 and SS-2 mandatory for a private limited company?
Yes. Section 118(10) of the Companies Act, 2013 makes observance of Secretarial Standards SS-1 and SS-2 mandatory for every company, and a private limited company is not carved out. SS-1 applies to meetings of the Board and its committees; SS-2 applies to general meetings such as the AGM and EGM. The only real exclusion is a One Person Company with a single director, which is exempt from Section 118. A private company that has defaulted on its ROC filings also loses the specific relaxations it would otherwise enjoy, so the full standard applies until the default is cleared.
What is the penalty for not following SS-1 or SS-2?
The penalty sits in Section 118(11). Default in complying with Section 118, which includes the Secretarial Standards, attracts ₹25,000 on the company and ₹5,000 on every officer of the company who is in default. Because meetings recur across a year (board meetings, committee meetings and the AGM), repeated lapses raise the officer-level exposure. Beyond the fine, non-compliance shows up as a qualification in the Secretarial Audit Report under Section 204 and as a finding during investor due diligence, which can matter more than the money during a funding round.
What changed in the revised SS-1 and SS-2 from 1 April 2024?
ICSI revised both standards, and with Central Government approval the new versions took effect from 1 April 2024. The revision aligned the standards with amendments to the Companies Act. The change with the biggest effect on private companies is the exemption condition: from 1 April 2024, the relaxations available to private companies, Section 8 companies, and government companies apply only if the company has not defaulted in filing its financial statements or annual return with the Registrar of Companies. A single missed AOC-4 or MGT-7 therefore removes the exemptions until the filing is regularised.
How many days do I have to record and sign board meeting minutes under SS-1?
Under SS-1, draft minutes should be circulated to all directors within 15 days of the meeting for their comments. The final minutes must then be entered in the minutes book within 30 days of the conclusion of the meeting and signed by the chairman of the meeting or the chairman of the next meeting. The minutes must record the date, time and venue, the directors present and absent, a fair summary of the discussion, the resolutions passed with the manner of voting, and any dissent expressed by a director. Keeping proof of circulation and the signing date is what satisfies an auditor.
Does an OPC or small company have to follow Secretarial Standards?
A One Person Company with only one director is exempt from Section 118 as a whole, though its Articles may still provide for recording minutes within 30 days. An OPC with more than one director must follow SS-1 for its board meetings. A small private company must observe the standards, though it operates under a lighter meeting regime and can, for instance, hold fewer board meetings in a year. The safest position is to treat SS-1 and SS-2 as applicable and document every meeting properly, because the cost of a qualified audit report far outweighs the effort of clean minutes.
How do Secretarial Standards connect to the Secretarial Audit under Section 204?
The Secretarial Audit under Section 204 is a separate obligation that applies to listed companies and larger public and private companies crossing prescribed thresholds. During that audit, the Company Secretary in Practice checks whether the company observed SS-1 and SS-2. So the standards are the substance and the audit is the check. If your meeting records comply with SS-1 and SS-2, the Section 204 report on those items comes back clean; if they do not, the auditor records a qualification. Companies below the audit threshold still have to follow the standards; they simply are not subject to the formal Section 204 review.