Appoinment in AGM

This query is : Resolved

Mohd Arsalan (Querist)
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15 March 2009 I want to discuss a problem that if a person handles the tax matter of a company during 11 a.m to 2 p.m of every working and by doing that he get Rs. 25000 per month. In upcoming AGM the company wants to appoint him as an statutory auditors. Will he laible to work in the shoes of statutory auditors?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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16 March 2009 NO he is a emploee of company and can not be appointed as auditor further he should be a practising CA for appointment as auditor.

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Under section 226(3), the following persons are not qualified for appointment as
auditors of a company :
(a) a body corporate;
(b) an officer or an employee of the company;
(c) a person who is a partner, or who is in the employment of an officer or employee of the
company;
(d) a person who is indebted to the company for more than Rs. 1,000 or who has given any
guarantee or provided any security in connection with the indebtedness of any third person to the
company for more than Rs. 1000; and
(e) a person holding any security of that company.
Explanation - For the purposes of this section, "security" means an instrument which carries voting
rights.
(4) It is further laid down in sub-section (4) of section 226 that a person is not eligible for appointment
as auditor of any company, if he is disqualified from acting as auditor of that company’s subsidiary
or holding company or of any other subsidiary of the same holding company.
(5) Sub-section (5) of section 226 provides that if an auditor, after his appointment, becomes subject
to any of the disqualification specified in sub-sections (3) and (4), i.e., in respect of matters
described in paragraphs (3) and (4) above, he shall be deemed to have automatically vacated his
office.