23 July 2011
Removal of Auditor before the expiry of his term
REMOVAL OF AUDITOR APPOINTED IN A GENERAL MEETING UNDER SECTION 224 – Ordinary Resolution
Removal of Auditor.-Sub-section (7) of section 224 makes special provision for the removal of the auditors before the expiry of their term in General Meeting after obtaining the previous approval of the Central Government in that behalf. This provision has been made to meet a situation where an existing Auditor is unable in fulfill his duties for any reason or is unsuitable for continuing in his appointment.
Application for removal of auditor to Central Government.- The application for removal of Auditor of the Company before the expiry of his terms of office must be addressed to the Regional Director concerned to whom the power of Central Government has been delegated. There is no prescribed format of this application. The application should set out in detail the reasons for the proposed removal of the Auditor’s and it must be accompanied by the following documents.-
1. A copy each of the Memorandum and Articles of Association of the Company.
2. Proof of deposit of requisite fee.
The Regional Director may generally obtain an explanation from the concerned auditor about his views on the matter and may also afford an opportunity of being heard personally.
Forwarding of application.- A copy of the application should be delivered to the Registrar of Companies concerned electronically.
ILLUSTRATIVE RESOLUTION
“RESOLVED that M/s…………………., the Chartered Accountants, ……………, who were appointed as the Auditors of the Company at the last Annual General Meeting to hold office up to the conclusion of the next Annual General Meeting of the Company be and are hereby removed from such office of the Auditors, before the expiry of their term, such removal having been previously approved by the Central Government in that behalf.”
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