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private company, appointment of auditor

04 May 2019

what are the criteria for private companies for appointment , rotation of auditor in regard to paid up capital, and public borrowings?

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vaishali singh (trainee) (395 Points)
Replied 04 May 2019

appointment of auditor is based on the government co.or a company other than government co.appointment of auditor shall be in accordance with section 139,rotation of auditor be applicable under rule 5 to all private companies having paidup capital of 50 crore or more ,all companies having public borrowings from bnaks , financial institution,public deposit of 50 crore or more.

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Jatin Bajaj (CS) (2930 Points)
Replied 04 May 2019

As per the provisions of Section 139 of the Companies Act 2013, every auditor shall be appointed by the Company in its general meeting who shall hold the office till the conclusion of sixth Annual General Meeting. usually auditors are appointed for the period of 5 years in case of individuals and 2 consecutive term of 5 year each in case of Audit Firm.

And the auditors are rotated after the expiry of the tenure as per the provisions mentioned in the Companies Act 2013.

For the following Companies, the provisions of rotation of auditors are applicable.

1. The Private Companies whose paid up share capital is more than 50 crore or whose paid up share capital is not within the limit of 50 crore but borrowing is more than 50 crores as per the latest audited balance sheet.

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