APPOINTMENT OF AUDITOR IN AGM 2019 - Series 493
APPOINTMENT OF AUDITOR IN AGM 2019
This Editorial is updated till 28th August, 2019.
In this editorial auditor shall discuss the few
questions in relating to Appointment/ Re- appointment of Auditor in AGM of 2019.
I.
In case term of auditor is ending in AGM 2019.
Company wants to appoint new auditor in place of retiring auditor? What shall
be process of the same?
II.
Whether an auditor can be appoint for more
than two terms of 5 year in a Private Limited Company?
III. Whether an auditor can be appoint for term
less than or more than 5 year in a single term?
A. In case term of
auditor is ending in AGM 2019. Company wants to appoint new auditor in place of
retiring auditor? What shall be process of the same?
Provisions of appointment of Auditor are mentioned in
Section 139 of Companies Act, 2013.
As per Section 139(1),
Extract of Law: - “Subject to the provisions of this Chapter,
every company shall, at the first annual general meeting, appoint an individual
or a firm as an auditor who shall hold office from the conclusion of that
meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every
sixth meeting and the manner and procedure of selection of auditors by the
members of the company”
Note: - If
term of any auditor is getting expired on upcoming AGM (e.g. AGM 2019). Means now
its call of Company to re-appoint him or appoint new auditor.
If Company wants to
appoint New Auditor:
As per provisions of Section 139 Company will pass
Board Resolution in Board Meeting for appointment of new auditor subject to approval
of Shareholders in upcoming Annual General Meeting.
Note:
·
There is no need to obtain any letter of
retirement from the old Auditor.
·
There no need to file any form for expiry
of term of old Auditor.
·
No need have obtained NOC from the retiring
auditor.
·
Company will send notice of AGM to retiring
auditor as his term will end at the end of the Annual General Meeting.
B. Whether an auditor can
be appoint for term less than or more than 5 year in a single term?
Provisions of terms appointment of Auditor are
mentioned in Section 139 of Companies Act, 2013.
As per Section 139(1),
Extract of Law: - “Subject to the provisions of this Chapter,
every company shall, at the first annual general meeting,
·
appoint an individual or a firm as an auditor
who shall hold office from the conclusion of that meeting till the conclusion
of its sixth annual general meeting and
·
thereafter
till the conclusion of every sixth meeting and the manner and
procedure of selection of auditors by the members of the company”
Note:
No where under section 139 it is mentioned that auditor
shall be appoint for 1,2,3,4,5,6, years. Terms of appointment of auditor is
mentioned in Section 139(1) only.
As per section ‘terms of auditors shall be as follow:
·
Term of appointment of first auditor shall
be till conclusion of first AGM
·
Further term of auditor shall be till 6th
AGM of Company
[e.g. if auditor is appointed in 14th
AGM then term of auditor shall be till 19th AGM]
·
Term of auditor in case of auditor
appointed in casual vacancy shall be till conclusion of subsequent Annual
General Meeting.
In other word, term of appointment
of auditor shall be till 6th AGM from the date of appointment.
Therefore, one can opine that statutory auditor can be appoint minimum or maximum
for 5years. There is no option to appoint auditor for less than 5 year or more
than 5 year in a single term.
C. Whether an auditor can
be appoint for more than two terms of 5 year in a Private Limited Company?
Provisions of terms appointment of Auditor are
mentioned in Section 139 of Companies Act, 2013.
As per Section 139(2),
Extract of Law: - NO Company
mentioned below
·
Listed
Company or
·
all Unlisted
Public Companies having paid up share capital of rupees ten crore or more;
·
all Private
Limited companies having paid up share capital of rupees fifty crore
or more;
·
All
Companies having paid up share capital of below threshold limit
mentioned in (a) and (b) above, but having public borrowings from financial
institutions, banks or public deposits of rupees fifty crores or more
a)
an individual as auditor for more than one term of five consecutive years; and
b)
an audit firm as auditor for more than two terms of five consecutive years:
Note:
As per extract of law
mentioned above, Private limited Company having paid up share capital 50 crore
more or having public borrowings from financial institutions, banks or public
deposits of rupees fifty crores or more can’t continue auditor after
expiry of two terms.
In other words, a auditor or
auditor firm can be appoint as statutory auditor even after expiry of two terms
of appointment if such company doesn’t fall under above mentioned limites.
(Author – CS Divesh Goyal, GOYAL DIVESH &
ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this
document have been prepared on the basis of relevant provisions and as per the
information existing at the time of the preparation. Although care has been
taken to ensure the accuracy, completeness and reliability of the information
provided, I assume no responsibility therefore. Users of this information are
expected to refer to the relevant existing provisions of applicable Laws. The
user of the information agrees that the information is not a professional
advice and is subject to change without notice. I assume no responsibility for
the consequences of use of such information. IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION. This is only a
knowledge sharing initiative and author does not intend to solicit any business
or profession.
I wish to show thanks to you just for bailing me out of this particular trouble. As a result of checking through the net and meeting techniques that were not productive, I thought my life was done.liquidation deregistration in dubai
ReplyDeleteI have to voice my passion for your kindness giving support to those people that should have guidance on this important matter.trademark assignment in india
ReplyDeleteGreat share!
ReplyDeleteI love this bucket list and you know you're right. sand blasting machine manufacturer. We all have the same amount of hours in a day so put them to good use. We all have to start somewhere and your plan is perfect. I understand the way of the attractive to the customer with the products sand blasting machine.
Sand blasting machines like shot blasting machine, sand blasting machine, and grit blasting machines, Wood Working Machinery Dust Extraction unit, Abrasive Blasting Media and various others. Keep it works and share with us your latest information. My time will come but I know I'm on the right path.
They are similar to small communities that you own - check them out if you haven't already. It's all got a lot better than before!t. Value that list of thousands but I'll get there.
Thanks for sharing. Have a nice week ahead.
Visit at : www.gritblast.co.in
Also check
portable shot blasting machine
portable sand blasting machine
sand blasting cabinet
grit blasting cabinet
shot blasting cabinet
Regards,
Ankit Manawat.