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Whether sec 139(1) is applicable only to new companies?

ankit somani (Partner) (82 Points)

18 July 2015

Dear all,

Some of our professional colleagues have been wrongly appointed Auditors for 1 year in last year in case of private companies (on which Rotation is NOT applicable)…..

Whether this year can they be appointed again for 1 year or remaining 4 years?

Some experts feel that applicability of Sec 139(1) is only on those companies which are registered in the Companies Act 2013 (and NOT on erstwhile companies)……..Is it really so?

What should be the remedial action NOW in Current Year?

Warm Regards

ANKIT SOMANI

FCA (Throughout 1st Attempt, Ranker)

CS (Ranker, Silver Medalist)

B. COM

+91-98297-45560

+91-97844-64229

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2 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 18 July 2015

Section 139(1) clearly provides that "every company shall, at the first annual general meeting, appoint.....". Section 2(20) defines company as a company incorporated under this Act or under any previous company law. It is not clear as to on what basis experts have given the opinion that this Section is not applicable to companies registered under previous Companies Act.

If the appointment has not been done as per Sec.139(1) last year, at least for this year the appointment should be as per this provision to avoid continued default.

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prakash (Company Secretary) (1352 Points)
Replied 19 July 2015

Dear Ankit,

Section 139 (1) of the Companies Act, 2013 is applicable to every company whether registered under Companies Act, 2013 or any previous Act. see that, at least your company appoints auditor as per section 139 (1) of Act this year. since retire by rotation is not applicable to your company, company can appoint auditor for period of five year in this years AGM.