Say Pvt. Ltd. Co. appointed M/s. ABC as its auditors in EGM and M/s. ABC was the auditor for fy. 2010-11. And in AGM held on 02 nd sep. 2011 M/s. ABC reappointed.
Now Co. want to appoint M/s. XYZ as their auditors for fy. 2011-12.And remove M/s. ABC before their term.
What is the procedure for removal of auditors appointed in EGM of the Pvt. Ltd. co. & Appointment of new auditor in his place.
I think EGM is sufficient for removal of auditor & appointment of new auditor in his place. and notice to be given to previous auditor & shareholders.
Is that so? Is there any time specified for above procedure? As company has only two directors, does that mean notice to shareholder is notice to directors?
Yes, member can remove the auditor after appointed at AGM.
If you read section 224(7), except first auditor, any auditor appointed under this section may be removed from office before the expiry of his term only by the company in general meeting, after obtaining the previous approval of the Regional Director in that behalf.
13 July 2012
According to Sec 224(7), any Auditor other then first auditor appointed by the Board, may be removed if-
1. An ordinary resolution is passed for that purpose at a general meeting and
2. the approval of central govt is obtained. The powers are delegated to the Regional Director.
Notice to shareholder is different than notice to director.
PROCEDURE 1. Convene a board meeting for removal Auditor at an extraordinary general meeting and pass the resolution to: a. remove the Auditor giving reasons; b. approve the draft notice of EGM and explanatory statement. c. fix date, time and place of extraordinary general meeting. d. authorise the Company Secretary or a director to make an application to the Central Government (i.e Regional Director) for the removal of the Auditor.
2. Inform the Auditor about Board Decision. Auditor can make representation in EGM.
3. File an application for the approval to the Regional Director in e-Form 24A within whose jurisdiction the registered office of the company falls.
4. At the extraordinary general meeting, a resolution must be passed as an ordinary resolution.
5. The vacancy due to the removal of the Auditor at theextraordinary general meeting must be filled by the Board of directors of the company as a casual vacancy.
5. The company should intimate the auditor concerned about his appointment within 7 days of his appointment.
6. The auditor should intimate the Registrar of Companies about his appointment within 30 days of his appointment by filing Form 23B.
CAclubindia
