I am working in a private limited company and just wanted to know whether company is liable to have audit committee? And if yes then what are the acts and regulations would apply on it?
No, it will not apply to your private limited company. The provision of Independent Director is not applicable so constitution will also not possible.
Composition of the Audit Committee
As per clause 49 of the Listing Agreement, the audit committee shall have minimum three directors as members. Two third of the members of audit committee shall be independent directors. All the members of the audit committee shall be financially literate and at least one member shall have accounting or related financially management expertise. By implication, audit committee can to the extent of one-third of the strength comprise of non-independent directors including executive directors.
As per section 292A of the Companies Act, 1956, not less than three directors or such higher number of the directors as the Board may determine of which two third of the total number of directors shall be a directors other than MD or WTD.
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