Appoint ment of auditor of pvt. ltd.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2013 Dear Sir

I want to ask for appointment of auditor of pvt. ltd. company.
We have appointed a auditor in last agm held in sept 13 but we have not given any intimation for his appointment. now we wish to appoint other auditor how we can appoint the other auditor as our old auditor say that as of now there is no auditor of your company. please let me know to move further.

Ajay Mishra

Ajay Mishra (Expert)
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19 December 2013 If you have passed resolution for appointment of auditor in Sep 2013 AGM then it will be considered as you have made appointment.

You can do intimation today about such appointment and auditor will file it with late payment.

Now if you want to appoint other auditor then need to take resignation from old auditor.

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2013 Dear Sir

thank you very much for your reply

But if appointed auditor is refusing to give his resignation that what will be remedy to appoint another auditor.

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Ajay Mishra

Ajay Mishra (Expert)
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19 December 2013 Firstly you send appointment letter to auditor who has appointed in AGM.

There after you can remove such auditor if he is not giving resignation.

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2013 please let me know the procedure to remove the auditor.

Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013
The Board of directors of a company has no powers to remove an auditor appointed by the company in general meeting. Accordingly, the said auditor can be removed only by the company in general meeting after receiving the previous approval of the Central Government. Powers has been delegated to the Regional Director vide Notification No. GSR 288(E), dated 31-5-1991.

An auditor can be removed before expiry of his term only by the company in general meeting after obtaining the previous approval of the Central Government (Power has been delegated to the Regional
Director).

Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013 Procedure for removal of auditors

The company shall take further action as prescribed in section 225 and make an application to the
concerned Regional Director in e-Form 24A as prescribed by the Notification No. GSR 56(E) dated 10th Feb., 2006 for his approval.

Person filing
Managing Director or Whole-time Director or Manager or Secretary.

Time limit

The application has to be filed for appointment within seven days of the annual general meeting and
for removal before general meeting.

Guidelines

(i) The power of the Central Government to appoint auditors become exercisable when no auditors
are appointed or re-appointed at an annual general meeting of a company.
(ii) Obligation has been cast on the company that within seven days of the Central Government power
becomes exercisable; it shall give a notice of that fact to the Central Government in the prescribed
e-Form 24A electronically.
(iii) The powers of the Central Government under section have been delegated to the Regional Directors of the Department of Company Affairs.
(iv) Reasons for not appointing any auditor at the annual general meeting and other relevant details should be furnished.
(v) Only the company in general meeting after obtaining the previous approval of the Central Government (Regional Director) can remove an auditor before expiry of his term.
(vi) The remuneration of auditors appointed by the Central Government may be fixed by the Central Government. But if the Central Government does not fix such remuneration then remuneration of auditors shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine.
(vii) The remuneration which has been fixed for an auditor is considered to be inclusive of all expenses allowable to him and consequently, he cannot claim any amount in addition to the fixed remuneration.

Consequences

Omission or failure to pass a special resolution at an annual general meeting for appointment of an auditor u/s 224A has under mentioned two consequences:
(i) It shall be deemed that no auditor or auditors had been appointed by the company at its annual general meeting;
(ii) The power of the Central Government under section 224(3) to appoint auditors becomes exercisable.

Querist : Anonymous

Querist : Anonymous (Querist)

20 December 2013 Thank you very much

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Ajay Mishra

Ajay Mishra (Expert)
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20 December 2013 My Pleasure...