22 August 2016
Sir, I am a CA in practice. My son in law has started private limited company to manufacture HDPE bags. He is holding 25% equity in the company with other 4 directors who hold 75% of the equity. My daughter is not a director, not holding any position and not working with the said company. She is house wife.
Can I accept assignment of statutory and tax audit of the said private limited company ?
22 August 2016
Sir, As per Section 141(3)(f) of Companies Act,2013 (Disqualification of Auditors) A person whose relative is a director or is in the employment of the company as a director or key managerial personnel. And As per section 2(77) of Companies Act,2013 relative includes Daughter's Husband. As per my view, In Your case your Son of Law is Director of The company hence you are not eligible to appoint as a company auditor of the company. Thanks.
22 August 2016
Sir, Thanks for reply. I checked up with Company Secretary that after Companies Act 2013, father in law is not in the definition of relative. I can not appoint my son in law as auditor.
As per my understanding definition of Relative refer AS 18 so far it is concern ICAI Act. In ICAI Act "the expression “relative”, in relation to a member means the husband, wife, brother or sister or any lineal ascendant or descendant of that member". Is married daughter comes under lineal relationship ? Regards. BBPatel
22 August 2016
Sir, You are right that father in Law is not in definition but here as common reading of your query you are practicing CA means the company appoint you as auditor but before your appointment it is your responsibility to check the disqualifications of section 141 and when you read this section you find the above (f) clause in which person means an auditor and his relative means the relative define by act u/s 2(77) As i think you do not need to check the reverse relationship is covered under relative or not and you simply disqualified as your son of law is director. Sir, As per as-18 definition of relative in relation to an individual, means the spouse, son, daughter, brother, sister, father and mother who may be expected to influence, or be influenced by, that individual in his/her dealings with the reporting enterprise In above definition i think daughter includes married daughter Thanks a lot once again
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