An auditor is appointed in AGM and was removed after 5 days of appt....and someone else is appointed in his place....can somene plz tell me what formalities should i go through to appoint the new auditor...and remove the previous auditor
Rajat Gupta (CA) (54 Points)
11 December 2012An auditor is appointed in AGM and was removed after 5 days of appt....and someone else is appointed in his place....can somene plz tell me what formalities should i go through to appoint the new auditor...and remove the previous auditor
CA Hareesh
( )
(1637 Points)
Replied 12 December 2012
As per the information given, if an auditor is said to have been removed in 5days after his appointment, it implies that he has been removed BEFORE THE EXPIRY OF THE TERM OF OFFICE. therefore CENTRAL GOVT APPROVAL is necessary before appointing the new auditor.
In addition to the CG approval, all the usual appointment provisions like Sec 224 series will apply.
Sneha
(Company Secretary)
(1594 Points)
Replied 12 December 2012
An auditor can be appointed only at a General Meeting by the shareholders. Since AGM has been conducted, you call a board meeting to call EGM for appointment of new auditor. After EGM auditor has to file Form 23B with the ROCwithin 30days from the date of EGM to intimate ROC of such appointment. Please note two important points over here.
1. Obtain a no objection certificate from the previous auditor
2. As you mentioned you want to appoint new auditor after 5 days. But EGM notice should be given to members before 21 clear days of the date of EGM. You can call EGM at a shorter notice by consent of 90% of the shareholders in Form 22A.
Other views solicited.
Sneha
(Company Secretary)
(1594 Points)
Replied 12 December 2012
Form 22A
Consent by shareholder for shorter notice {Pursuant to section 171(2)}
To The Board of Directors
ABC Private Limited
ADDRESS
I, ____________l S/o Shri ____________, R/o _______________________ holding _____ Equity shares of Rs.10 each, constituting ____% of the total paid-up share capital of the company in my own name, hereby give consent, pursuant to section 171(2) of the Companies Act, 1956, to hold the Extraordinary General Meeting on (Day, Date) at shorter notice.
(Sign of Shareholder)
Name of shareholder
Sneha
(Company Secretary)
(1594 Points)
Replied 12 December 2012
Resolution to be passed at General Meeting as Ordinary Resolution
“RESOLVED that pursuant to provision to Sub –section (6) (a) of section 224(5) of the Companies Act,1956, M/s. ___________, Chartered Accountants, (Address), be and are hereby appointed as the auditors of the Company to fill the vacancy caused by the resignation of M/s. ____________, Chartered Accountants, to hold office from the date of this meeting until the conclusion of the next annual general meeting of the Company at a remuneration as may be fixed by the Board of Director in consultation with the said Auditors.”
Sneha
(Company Secretary)
(1594 Points)
Replied 12 December 2012
Resolution to be passed at Board Meeting calling EGM
APPOINTMENT OF M/S. __________, CHARTERED ACCOUNTANTS AS THE AUDITORS OF THE COMPANY TO FILL THE VACANCY CAUSED BY THE RESIGNATION OF _________, CHARTERED ACCOUNTANT, THE PRESENT AUDITORS OF THE COMPANY
The Chairman informed the Board that M/s. _________, Chartered Accountants resigned from their office as auditors of the Company. Therefore the Chairman expressed his opinion to appoint another auditor in place of M/s. ___________, subject to the approval of shareholders in General Meeting.
The Board expressed its satisfaction to the matter discussed and passed the following Resolution.
“RESOLVED that an Extra Ordinary General Meeting of the shareholders be called on (Day, Date and Time) for the appointment of Auditors of the Company. The draft notice along with explanatory statement thereto as placed before the Board be and is hereby approved and the same be sent to the shareholders whose name appear in the register of members as on (Date of this Board Meeting).”
“RESOLVED further that in the said Extra Ordinary General Meeting of the Company the following resolution be moved:
“RESOLVED that pursuant to provision to Sub –section (6) (a) of section 224(5) of the Companies Act,1956, M/s. ___________, Chartered Accountants, (Address), be and are hereby appointed as the auditors of the Company to fill the vacancy caused by the resignation of M/s. ____________, Chartered Accountants, to hold office from the date of this meeting until the conclusion of the next annual general meeting of the Company at a remuneration as may be fixed by the Board of Director in consultation with the said Auditors.”
Pramod Limaye
(Chartered Accountant)
(172 Points)
Replied 12 December 2012
Thanks Sneha for the detailed answer.
Rajat Gupta
(CA)
(54 Points)
Replied 12 December 2012
Thank You Sneha & Hareesh....
Can u also tell me how to get CG approval for removal of auditor before expry of his term???
Sneha
(Company Secretary)
(1594 Points)
Replied 13 December 2012
Please note that the procedure I told is when auditor agrees to tender his resignation. However, an auditor cannot be removed from his office before the expiry of his term without the permission of the Regional Director. For removal of auditor special notice shall be requied and procedure laid down under section 224(7) has to be complied with.
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