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sec 140

ashok kabdal (article) (107 Points)

15 April 2018

One question....1st auditor is appointed by BOD and holds the office till conclusion of next AGM..if such auditor is not reappointed at such AGM then why co. requires the permission of CG for removal before expiry of his term...bcz reappointment of auditor is subject to rectification in GM.

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3 Replies

Sana Sultana Mussu (Student) (5119 Points)
Replied 15 April 2018

As per section 140(1), the auditor can be removed from his office before the expiry of his term only by a special resolution after obtaining the previous approval of CG...
irrespective of who has appointed the auditor(first or subsequent) , if he is being removed before the expiry of the term , prior approval of CG is required as given in section 140(1) and also the auditor must be given a reasonable opportunity of being heard..
if you still have doubt...
please ask your question in other way...

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CS Smreti (cs) (641 Points)
Replied 15 April 2018

Section 140 is applicable when auditor is removed before expiry of his term.
however in case auditor's term is expiring in the next agm amd he is not reappointed then section 139(9) comes into picture for which CG approval not required.

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Jatin Bajaj (CS) (2930 Points)
Replied 16 April 2018

As per the provisions of the Companies Act 2013 the tennure of the First Auditor is till the conclusion of First AGM. So if auditor is not reappointed after the conclusion of First AGM , then provision of section 140 is not applicable. Section 140 speaks of the removal of auditor before the expiry of his tennure. but in case of first auditor, the tennure of the first auditor is till the conclusion of first AGM only