PROCESS FOR APPOINTMENT
OF AUDITOR UNDER COMPANY ACT - 2013
SECTION 139(8) OF
THE COMPANIES ACT, 2013
APPOINTMENT OF AUDITOR WHEN RESIGNATION IS GIVEN BY EXISTING AUDITOR:
This situation is called CASUAL VACANCY:
CASUAL VACANCY arises because of
resignation : When existing Auditor give resignation, in that case of Casual
vacancy arises because of resignation by auditor then appointment
of auditor on his
place by Board of Directors within 30 days and the
same should be approved by the company within 3 months
of recommendation and
shall hold office till conclusion of next AGM.
CASUAL VACANCY also arises because of other reasons (disqualifications as per 141) : By Board of Directors within 30 days, in that Case no approval is required
Any casual vacancy in the office of an auditor shall–
(i) in the case of a company other than a company whose
accounts are subject to audit by an auditor appointed by the
Comptroller and Auditor-General of India, be filled by the
Board of Directors within thirty days, but if such casual
vacancy is as a result of the resignation of an auditor, such
appointment shall also be approved by the company at a general
meeting convened within three months of the recommendation of
the Board and he shall hold the office till the conclusion of
the next annual general meeting;
(ii) in the case of a company whose accounts are subject to
audit by an auditor appointed by the Comptroller and
Auditor-General of India, be filled by the Comptroller and
Auditor-General of India within thirty days:
Provided that in case the Comptroller and Auditor-General of
India does not fill the vacancy within the said period, the
Board of Directors shall fill the vacancy within next thirty
days.
APPOINTMENT OF
AUDITOR IN PLACE OF RETIRING AUDITOR BY SPECIAL NOTICE :-
As per provisions of
sub-section (4), special notice is required from members
proposing to move a
resolution at the next annual general meeting to appoint a
person other than
the retiring auditor or to provide that the retiring auditor
shall not be
re-appointed.
Exception : Special Notice shall
not be required in case
where the retiring auditor has completed a consecutive
tenure of 5 years or,
as the case may be, ten years, as provided under sub-section
(2) of section 139.
Below Points necessary to be Complied :
- As per provisions of sub-section (4), Company on receipt of such special notice for removing auditor, should forthwith send a copy of the same to the concerned auditor.
- As per provisions of Sub-section (4) (iii) provides Right to the Retiring Auditor to make a Representation to the company in writing (Within reasonable length).
- Auditor can request its notification to the members of the company.
- In case of no such request by auditor to the company to notify the representation made by auditor to the members, the company is not bound to do such things.
- If the company receives the representation within reasonable time, and if requested by the auditor, the company will have to state in the notice to the members that such a representation has been made and send a copy of the representation to the members.
- In case of non Circulation of Representation because it was received too late or by any other default made on the part of the Company, the auditor may require that the representation be read at the meeting and also claim to be heard orally at the general meeting as per sub-section (1) of Section 140.
- Proviso to sub-section (4) provides that in case copy of representation is not sent due to late receipt or on the part of the default of the Company, then it is necessary to Filed the Copy thereof with the Registrar and there is no time limit has been prescribed for filing, and the Copy is required to be filed in Form GNL-2.
Forms Required to be filed with
ROC:
1. e-form- MGT-14 (Attachment-
Special Notice,
Notice of GM, Resolution of General Meeting).
2. e-form GNL-2 (Attachment-
ADT-1(consent of new auditor).
Procedures:
1. Obtain
certificate in writing from the proposed auditor confirming
his eligibility to
be appointed.
2. Convene a
Board meeting within 30 days of arising casual vacancy after
giving notice to
all directors and pass resolution appointing the new auditor
in the place of
old auditor.
3. Inform the
auditor so appointed with a certified copy of resolution.
4. Issue notice
to hold general meeting within 3 months from the date of
recommendation of the
Board to the members of the company.
5. Hold the
general meeting and approve the appointment of auditor already
made by the
Board of directors.
6. Inform the
Registrar in prescribed form with requisite filing fees and
annexures.
7.
In case of listed company, forward promptly to the stock
exchange the notice
and proceedings of the general meeting.
Point To Be Noted
4th Proviso to Sec 139(1) of the Companies
Act 2013 read with Rule 4(2) of the
Companies (Audit and Auditors) Rules,
2014 casts obligation on the Company
to file a notice of
appointment of Auditor with the Registrar within 15 days of
the meeting in which the auditor is appointed in
Form ADT-1.
Section
139 (8) deals with the appointment of an auditor in case of casual vacancy arising in
the office of an auditor
as a result of resignation
of an auditor
subject to such appointment to be approved by the company at a general
meeting [i.e EGM] and does not speak anything about filing notice to ROC in
such cases of appointment of an auditor.
In the light of above, as the
matter relates to the filing of notice in Form ADT-1 to RoC
for appointment of Auditor,
in my view, the same applies to the appointment of
new auditor u/s 139(8) to
fill the
casual vacancy created by
resignation of auditor and
ADT-1 is required to be filed in such case by the company to the RoC
within 15 days of
appointment of new Auditor at EGM.
Please also note that Form ADT-3 {Notice of Resignation} is required to
be filed to the RoC
by the Auditor who resigned.
Draft Format
EOGM (Extra Ordinary
General Meeting) Resolution
========================================================================
CERTIFIED TRUE COPY OF THE
ORDINARY RESOLUTION PASSED AT THE EXTRA ORDINARY GENERAL MEETING OF ________ PRIVATE LIMITED HELD ON ___________ THE ___ST ___, 20-_ AT________, CITY : _____, PIN CODE :______, STATE :____________ (INDIA)
APPOINTMENT
OF STATUTORY AUDITORS TO FILL CASUAL VACANCY
To consider and, if
thought fit, to pass, with or without modification(s), the
following resolution
as an Ordinary Resolution:
"RESOLVED
THAT
pursuant to the provisions of Section 139(8) and other applicable
provisions, if any, of the Companies Act, 2013 as amended from time
to time or any other law for the time being in force (including any
statutory modification or amendment thereto or re-enactment thereof
for the time being in force), M/s. __________, Chartered
Accountants, (City Name) (Firm Registration No. ______) be and are hereby
appointed as Statutory Auditors of the Company from this
Extraordinary General
Meeting to fill the casual
vacancy caused by the resignation of M/s. ___________,
Chartered Accountants AND THAT M/s._____________, Chartered
Accountants hold office from the conclusion of this meeting until the
conclusion of the ensuing Annual General Meeting and they shall
conduct the Statutory Audit for the year ended 31st
March,
20__ on such remuneration and
reimbursement of out of pocket expenses for the purpose of
audit as may be approved the Board of Directors."
Date :
Place :
For _____________ Private Limited
____________
Director
DIN
No: _____
Address: _____________,
______________
City : _________
Pin Code : ______
State : ________
(India)
A member entitled to attend
and vote at the annual general meeting (the “meeting”) is
entitled to appoint a proxy to attend and vote on a poll
instead of himself and the proxy need not be a member of the
company. The instrument appointing the proxy should,
however, be deposited at the registered office of the
company not less than forty-eight hours before the
commencement of the meeting.
A person can act as a proxy on behalf of
members not exceeding fifty and ___ holding in the
aggregate not more than ten percent of the total share capital
of the Company carrying voting rights. A member holding more
than ten percent of the total share capital of the Company
carrying voting rights may appoint a single person as proxy
and such person shall not act as a proxy for any other person
or shareholder.
An explanatory statement pursuant to
section 102 of the Companies Act, 2013 relating to the special
business to be transacted at the meeting is annexed hereto.
EXPLANATORY
STATEMENT UNDER SECTION 102(1) OF THE COMPANIES ACT, 2013
M/s. __________, Chartered Accountants of the Company have
tendered their resignation from the position of Statutory Auditors due to unavoidable
circumstances
resulting into a casual vacancy in the office of Statutory Auditors
of the company. As envisaged by section 139(8) of the Companies Act,
2013 ("Act"). Casual vacancy caused by the resignation of
auditors can only be filled up by the Company in general meeting. The
Board proposes to appoint M/s. __________, Chartered
Accountants, (City Name), be appointed as the Statutory Auditors of the
Company to fill the casual vacancy caused by the resignation of M/s. _________, Chartered Accountants. M/s. _____,
Chartered Accountants, (City Name) have conveyed their consent to be
appointed as the Statutory Auditors of the Company along with a
confirmation that, their appointment, if made by the members, would
be within the limits prescribed under the Companies Act, 2013.
The
Board of Directors of the Company proposes their appointment.
None
of the Directors in any way are concerned or interested in the said
resolution.
Date :
Place :
For _____________ Private Limited
____________
Director
DIN
No: _____
Address: _____________,
______________
City : _________
Pin Code : ______
State : ________
(India)
Auditors Consent Letter
Date:-___________
To
The
Board of Directors
_______________Private Limited
CIN : ______________
__________________________,
________________________,
City : _____________,
Pin Code - ______
State : _________ (India)
Subject:-
Eligibility to be appointed as auditors under the relevant Provisions
of Chapter X of the Companies Act, 2013 read with
the companies (Audit and Auditors) Rules, 2014
We
are pleased to confirm the following:
- We are eligible for appointment as auditor and are not disqualified for appointment under the Companies Act, 2013 (the “Act”), the Chartered Accountants Act, 1949 and the rules or regulations made there under;
- The proposed appointment is as per the term provided under the Act;
- The proposed appointment is within the limits laid down by or under the authority of the Act;
- There is no pending proceeding against us (auditor’s firm) or any of partner(s) (auditor) with respect to professional matters of conduct.
For _____________
Chartered
Accountants
ICAI
Firm Registration No: ______________
__________________
(Partner)
Membership
No: ________
Intimation Letter By Company
Date_____________-:
To
M/s. ________________
Chartered
Accountants
City : _________
Dear
Sir,
Sub:
- Appointment as Statutory Auditors of the Company
This
is to inform you that at the 1st
Extra Ordinary General Meeting of M/s. _________ Private Limited
held on __st _______, 20__ at the registered office of the Company at Address: _____________,______________, City : _________ Pin Code : ______ State : ________(India), your firm M/s. ___________, Chartered
Accountant (Firm Registration Number: _____________) has been appointed as
the Statutory Auditor of our Company to fill the casual vacancy
caused by resignation of M/s. ___________ and you shall hold
office till the conclusion of the next Annual General Meeting of the
Company.
We
enclose the certified true copy of the resolution for your record.
Thanking
you
Yours
faithfully
For ______________ Private
Limited
______________
Director
DIN: _____________
Address: _______________,
_______________.
City : _________
Pin Code : ______
State : ________
(India)
Encl:
as above
Thanks & Regards,
CS Meetesh Shiroya
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