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Company law

ragavendhiran (audit asst) (93 Points)

16 May 2012

Sir/madam

One of the relative of the director - (applicant under incorporation) is a auditor ie father of managing director.

Can the auditor sign the MOA & AOA in the proposed company?

Can the company appoint as authorised person for process in company registeration ?

As per companies act only special resolution passed when remuneration exceed the limit u/s 314. ICAI suggested that a CA shall not accept the audit of the company where he is relative of the director.

Please give rightful direction.

Advance thanks to all

H.Ragavendhiran

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1 Replies

Aditya Soni (CS Final Student Trainee) (727 Points)
Replied 16 May 2012

Chapter – 7 Disqualifications under section 226

Note:

If a relative or partner of the auditor holds substantial interest in the business of the client, the auditor should not accept the appointment as per the latest amendment to the Code of Ethics. Before the amendment the auditor was required to disclose the substantial interest in his report. After the amendment the auditor cannot make such disclosure.

If the auditor of a company is a relative of the director, then the appointment of the auditor requires special resolution under section 314 of the Companies Act, 1956

Regards,

Aditya