30 October 2009
If there is a situation where in an AGM auditors are appointed but due to some reasons they dont take up the audit work, can the company for compliance with the laws appoint another auditor in place and comply with the legal procedures
Appointment of auditor by the Central Government (Regional Director) Section 224(3) provides that if no auditors are appointed or re-appointed at an annual general meeting of a company, the Central Government may appoint a person to fill the vacancy. Therefore, the power of the Central Government to appoint auditors becomes exercisable when no auditors are appointed or reappointed at an annual general meeting of a company.
The Company is required to give intimation electronically to the Regional Director (Powers of the Central Government were delegated to the Regional Director) vide Notification No. GSR 288(E) dated 31st May, 1991) in new e-Form 24A prescribed by Notification No. GSR 56(E) dated 10th Feb., 2006.
Obligation has been cast on the company that within seven days of the Central Government's power u/s 224(3) becoming exercisable, it shall give a notice of that fact to that Government; and if a company fails to give such notice, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees.
31 October 2009
Now in your case you have appointed auditor in the AGM but he is nor ready to take up audit. This situation is equal to non appointment of auditor in the AGM.
Now power of central govt. under section 224(3) as defined above become exercisable.
31 October 2009
Before the appointment of the auditor the company has to collect a letter from the proposed auditor that he/she is eligible to be appointed as auditor and he/she is willing to be appointed as such.once appointed the auditor has to file form 23B with concerned ROC within 30 days of the appointment. He holds office untill the next AGM The procedure laid down for appointment of another auditor in his place is through an EGM
CAclubindia
