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Appointment of auditor

arpit khetawat (9 Points)

21 August 2017

Sec 139(9) needs to be considered every year on ratification or once in 5 years at the time of appointment

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3 Replies

Sudhir Todkar (CS Professional) (1021 Points)
Replied 21 August 2017

Every year at annual general meeting..

Ronak mittal (Fresher) (10 Points)
Replied 22 August 2017

Yes, we need to consider Sec139(9) at every AGM. Non-considering it could result in unfair practice.

for example- An employee of the company cannot be an Auditor of the company as per sec 141 of the companies act,2013. so if we were supposed to consider sec139(9) only during the First appointment then it would result in appointing an auditor who is initially not an employee but later on becomes an employee of company, therefore, resulting in appointment of employee as an auditor of the company, which could not be the very purpose of the law.

Shrijay Sheth (Co-Founder) (2692 Points)
Replied 04 September 2017

The appointment of auditor in the company is governed by Section 139 of Companies Act, 2013. Here, the appointment is made once in Five Year i.e. from the conclusion of the 1st AGM till the conclusion of 6th AGM by filing Form ADT – 1 with the Ministry; however, the appointment shall be ratified at every AGM by passing an ordinary resolution for the Appointment of Auditor for the next financial year.

At every AGM, following the AGM of appointment of Auditor, the appointment of auditor shall be ratified by the members. If at any AGM, the appointment of auditor is not ratified by the members, the Board of Directors shall appoint another individual or firm as its auditor. Here, if the appointment is not ratified, the auditor shall vacate the office. Such vacancy shall be considered as Casual Vacancy.

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