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Few queries in company law

renuka (Student) (480 Points)

17 September 2015

1. As per Sec 139 (1) first auditor appointed shall hold office till conclusion of 6th AGM. But in Sec 139(2) and 139 (4), it says no individual shall be appointed for more than 5 consecutive years. 2. As per Sec 140(4), special notice is required to reappoint retiring auditor in AGM. What exactly is special notice and how is it diff from an ordinary notice? 3. Can a person be partner in more than one firm? TIA

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8 Replies

CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

There are two kinds of notice to be given to share holders for general meeting ordinary notice and other is special notice .. Special notice is required to be sent when some special nature of transaction is to be discussed at the meeting and explanatory statement shall be sent along with the notice explaining the essential facts regarding matter to be decided by voting at the meeting.. this will require 3/4th majority for passing resolution plus the notice shall be sent atleast clear 21days prior to tge date of gm..

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CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

So basically we need to send notices to shareholders to conduct gen meeting and matters are decided in meeting by them by passing resolution ordinary resolution requires ordinary notice and special resolution requires special notice to be sent.. now how to decide when to sent ordinary and when special? ordinary notice shall be sent for discussing routine matters whoch we considrr every year like annual accounts of company or deciding rate of dividend etc.. special for non routine matters like removing auditors coz we dont always remove them, acquiring a business etc

CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

Now your doubt regarding auditor's reappointment... you are rght sectn 139(1) says period of office shall be 5 years and 139(2 ) n (4) implements restriction on reappointment of auditors BUT this restriction Is ONLY for bug companies NOT for small and one person company So small companies can appoint retiring auditor without any restriction as per section 139(9) and (10)..

CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

And If I am not wrong then section 140(4) says special resolution is required to appoint some other auditor in place of retiring auditor and that can be done in any one of the following ways- either pass special resolution appointing some other auditor(new) in place of old(retiring) OR pass special resolution that retiring auditor shall NOT be reappointed...

CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

And aisa isiliye hai coz sec 139(10) says ki in case of small companies agar aap in mein se ek nahin karte(if this does not happens) Special resolution for appointment of new auditor in place of retiring is NOT passed or special resolution that retiring auditor shall NOT be reappointed is NOT passed or retiring auditor has NOT expressed unwillingness to get reappointed TOH purana auditor automatically by the act iteself reappoint ho jaega!! So this is tge rrason ki agr aap retiring auditor ki jagah new appoint karna chahte ho to pass a special resolution!!

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CA Seema Lalchandani (CA) (168 Points)
Replied 17 September 2015

I hope aapko concept samaj aa gaya ho.. If you still have doubt do let me know..

renuka (Student) (480 Points)
Replied 19 September 2015

Thanks a lot for your response. I am clear about the concept of special notice. About Sec 139 (1), if I consider a big co, auditor is required to continue till 6th AGM i.e. for a period of 6 years. But Sec 139(2) regarding rotation of auditors, says that auditor has to be changed within 5 years. Isn't this contradictory?

CA Seema Lalchandani (CA) (168 Points)
Replied 19 September 2015

No no its not in contradiction.. section 139(1) states that an audiyor can hold office from conclusion of 1st AGM till end og 6th AGM.. means his 1st dof officr starts from end of 1st agm eahan se 2nd year khatam hoga uski agm hogi matlb 2ng agm tab jakar 1st year khat hoga sind appointment aisi hi 3agm me 2nd year khatam hoga 4th agm mein 3saal honge since apptmt 5th agm ne 4th year and 6th agam end hogi tab usko 5 saal jo jaene since appointment... toh 5 years ka hi term hua na since END of 1st agm till 6th agm.. samaj aya apko ?