Disqualification of Auditor u/s 226 for having security of the the company in which the CA is auditor.
Some one told me this section is not applicable to Private limited company.
Is it so? I am confused............bcoz I have gone through a case where the auditor have the share of the company( pvt )
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 19 January 2010
hi raza,
The section does not say that it is not applicable to pvt co. hence disqualification applies even to pvt co.
ajay lohiya
(article)
(69 Points)
Replied 21 January 2010
hello dear, there is no specific provision in the law for a pvt. co. u/s 226 hence the same disqualification aalso applicable in the case of pvt. co.
Narasimharaju
(Article)
(28 Points)
Replied 21 January 2010
hello raza there is no specific provision in Section 226 dont get confuse
Mitali Agarwal
(Company Secretary)
(638 Points)
Replied 21 January 2010
I also agree with the learned members that Section 226 is also applicable to pvt. Co.
It is clearly specified in Ramaiya that qualifications and disqualifications of Auditor are applicable to all cos. be it private, public, Govt. or Section 25 Company.
Abhishek Jain
(c.a. final student)
(54 Points)
Replied 22 January 2010
I m agree with my frnds there is no any relaxation for Private company in Sec 226 ...
kushal
( )
(88 Points)
Replied 22 January 2010
SEC 226 reproduced below:-
(3) None of the following persons shall be qualified for appointment as auditor of a company -
(a) a body corporate;
(b) an officer or employee of the company;
(c) a person who is a partner, or who is in the employment, of an officer or employee of the
company;
(d) a person who is indebted to the company for an amount exceeding one thousand rupees, or
who has given any guarantee or provided any security in connection with the indebtedness of any
third person to the company for an amount exceeding one thousand rupees;
Provided that any shares held by such person as nominee or trustee for any third person and in
which the holder has no beneficial interest shall be excluded in computing the percentage of
shares held by him for the purpose of this clause.
Explanation: References in this sub-section to an officer or employee shall be construed as not
including references to an auditor.
I agree with all people above
CAclubindia
