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Change in status of auditor firm to partnership

18 February 2014

Dear Colleagues,

I have a query regarding Auditor appointment, in a company,

In an AGM an Auditor who is having proprietorship firm has been appointed, now after 31st March but before Date of signing of Balance sheet, the Auditor Dissolves its Proprietorship firm and enter into Partnership, now the query is whether the Auditors have to file fresh form 23B for change of name in auditors firm or he can sign the Balance sheet without any intimation to ROC,

and also

Is company required to pass an ordinary/Special resolution for fresh appointment of same auditor in the Company. what is the correct measure in this case?

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7 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 18 February 2014

1) Upon dissolution of the proprietorship firm the firm having specific registration No. from ICAI has ceased to exist and there is casual vacancy in the office of auditor.

2) Partnership firm will be treated as a new auditor having different registration No. from ICAI even though signing partner is the same.

3) Since it is not a case of resignation, such casual vacancy can be filled by the Board u/s 224(6)(a) to hold office till conclusion of next AGM.

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ACS Sheenam Pitroda (CS) (52 Points)
Replied 18 February 2014

So whether the Auditor needs to file fresh Form 23B in this regard after receiving intimation from the Board of acceptance of their firm as auditors?

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 19 February 2014

No - Sec.224(1A) requires that only an auditor appointed by AGM has to file his consent with ROC.

ACS Sheenam Pitroda (CS) (52 Points)
Replied 19 February 2014

yes section 224(1)(b) says that only auditor appointment in AGM has to file 23B but suppose if any other auditor is appointed and not the same and the vacancy is not because of resignation, and the Board has appointed a New auditor till the date of AGM, then also will we wont file form 23B?

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 19 February 2014

There is no provision in the Act for filing Form 23B in such case and hence not required.