Resignation by auditor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 December 2014 Please tell me the procedure to be followed when auditor resigned after audit of FY 2013-14 but before conducting AGM. Also directors also resigned after finalisation of balancesheet but before agm

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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17 December 2014 Procedure – where casual vacancy arises due to resignation of existing auditor
1. Intimate the proposed auditor(s) regarding the intention of appointing him/it as auditor and ask whether he/ it is eligible and not disqualified to be appointed as auditor of the company.
2. Obtain consent & certificate from auditor.
3. If Audit Committee required to be constituted under section 177, then obtain its recommendation (Section 139(11)).
4. Call Board meeting for the purpose of following:-
• Appointment of auditor in casual vacancy.
• Considering that the qualification & experience are commensurate with the size & operations of the company.
• Recommending the members to approve the appointment.
• Calling of EGM(to be held within 3 months from date of Board meeting).
5. Intimate the Auditor and file with ROC form ADT-1 within 15 days of EGM(since the appointment is not final until approval of members).

As per section 140(2) the Auditor who has resigned from the company shall file within a period of 30 days from the date of resignation, a statement in the prescribed form with the company and ROC indicating the reasons and other facts as may be relevant with regard to his resignation in form ADT-3

Duty of Company in case of Resignation by Director As per section 168 (1):
A director may resign from his office by giving a notice in writing to the company and the Board. The company shall on receipt of such notice;
• Take note of the same by passing a board resolution to that effect and
• As per Rule 15 of Companies (Appointment and Qualification of Directors) Rules, 2014 the company shall intimate the Registrar through Filing Of Form Dir.12 Within 30 Days From The Effective Date of Resignation on its website, if any.
• Company is also required to Place the Fact of Such Resignation in the Report of Directors laid in the immediately following general meeting by the company.