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Removal of auditor

CA Abhishek Sanwaria (CA Practise) (31 Points)

03 September 2013

one of a private co wants to remove his auditor and to appoint another...

the auditor is not willing to resign and get removed..

what is the procedure whereby i can remove him.?

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9 Replies

Ajay Mishra (Company Secretary) (74342 Points)
Replied 03 September 2013

Board of directors has no power to remove an auditor The Board of directors of a company has no powers to remove an auditor appointed by the company in general meeting. Accordingly, the said auditor can be removed only by the company in general meeting after receiving the previous approval of the Central Government. Powers has been delegated to the Regional Director vide Notification No. GSR 288(E), dated 31-5-1991.

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Ajay Mishra (Company Secretary) (74342 Points)
Replied 03 September 2013

Removal of auditor(s) at a general meeting with the prior approval of the Central Government An auditor can be removed before expiry of his term only by the company in general meeting after obtaining the previous approval of the Central Government (Power has been delegated to the Regional Director).

The company shall take further action as prescribed in section 225 and make an application to the concerned Regional Director in e-Form 24A as prescribed by the Notification No. GSR 56(E) dated 10th Feb., 2006 for his approval.

The application has to be filed for appointment within seven days of the annual general meeting and for removal before general meeting.

Ajay Mishra (Company Secretary) (74342 Points)
Replied 03 September 2013

Guidelines

(i) The power of the Central Government to appoint auditors become exercisable when no auditors are appointed or re-appointed at an annual general meeting of a company.

(ii) Obligation has been cast on the company that within seven days of the Central Government power becomes exercisable; it shall give a notice of that fact to the Central Government in the prescribed e-Form 24A electronically.

(iii) The powers of the Central Government under section have been delegated to the Regional Directors of the Department of Company Affairs.

(iv) Reasons for not appointing any auditor at the annual general meeting and other relevant details should be furnished.

(v) Only the company in general meeting after obtaining the previous approval of the Central Government (Regional Director) can remove an auditor before expiry of his term.

(vi) The remuneration of auditors appointed by the Central Government may be fixed by the Central Government. But if the Central Government does not fix such remuneration then remuneration of auditors shall be fixed by the company in general meeting or in such manner as the company in

general meeting may determine.

(vii) The remuneration which has been fixed for an auditor is considered to be inclusive of all expenses allowable to him and consequently, he cannot claim any amount in addition to the fixed remuneration.

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CA Abhishek Sanwaria (CA Practise) (31 Points)
Replied 03 September 2013

even at the expiry for his tenure- i cannot remove him and appoint someone else instead of him.

Ajay Mishra (Company Secretary) (74342 Points)
Replied 03 September 2013

Hi You can only appoint him at AGM, because term will expire on AGM only.

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CA Abhishek Sanwaria (CA Practise) (31 Points)
Replied 03 September 2013

ok , i ll call AGM remove him and appoint a new one

Anddy Thoper (Finance Professional) (43 Points)
Replied 05 September 2013

steps for removal of an auditor before theexpiry of his term is as follows:

Step I: A special notice of not less than 14 days is to be given by a shareholder to the Company for removal of the Auditor and appointment of new auditor subsequent to the removal of Auditor.

Step 2: Obtaining a certificate in writing from the new auditor to the effect of his eligibility to act as auditor, if appointed;

Step 3: Holding a board meeting of the Company topass the necessary resolutions.

Step 4: Intimate the Auditor of his removal inwriting along with a copy of the special notice asgiven by the Shareholder.

Step 5: Holding of EGM to pass the necessaryresolutions.

Step 6: Making application to the Regional Director(Central Government) in whose jurisdiction the registeredoffice of the Company falls in e-Form No. 24A

Step 7: Upon receipt of approval from regionaldirector intimate the new auditor of his appointment asan auditor of the Company to hold the office until theconclusion of next Annual General Meeting.

for more information visit - https://www.club4ca.com/threads/removal-of-auditor.310/

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CA.SKR (CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional) (442 Points)
Replied 08 September 2013

Let us presume that the Board of Directors & Promoters of a closely held company have decided to change the Auditors in the ensuing AGM. What are the steps involved if existing auditor is not to be re-appointed at AGM, but only new Auditor is to be appointed in place of existing auditors at the AGM? How this will be reflected in the Board meeting calling the AGM and in the Notice of AGM?

Thanks