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Auditors reappointment

Sahil Goel (Student CA IPC / IPCC) (56 Points)

02 September 2014

Section 139(10) of Companies Act 2013 says that, "Where at any annual general meeting, no auditor is appointed or re-appointed, the existing auditor shall continue to be the auditor of the company.". I am confused when would this be applied. Suppose the 6th AGM has been done, but no new auditor is appointed, will this rule apply even then. And does this rule also nullify the need of ratificatition.

Please Explain.

Regards,

Sahil Goel
Student - CA Final

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2 Replies

barkha (Ca article) (98 Points)
Replied 02 December 2016

yeah same doubt

Sahil Goel (Student CA IPC / IPCC) (56 Points)
Replied 01 February 2017

Section 139(10) applies only when the tenure of auditor's tenure is over and no auditor is appointed in the AGM - In this case the auditor whose tenure got over will continue till a new auditor is appointed. This will apply even if the auditor whose term got over is not eligible for appointment on account of section 139(2) i.e. Audit rotation is due.

This section will not cover the situation when the auditor's term was remaining however his appointment was not ratified in the AGM and no new auditor is appointed. In such case Rule 3 will apply and BOD shall appoint new auditor within 60 days. And auditor whose appointment was not ratified cannot continue.

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