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Rotation of auditor

Dhara (Company Secretary) (298 Points)

31 August 2016

Dear All,

An auditor is required to be appointed for 5yrs whether public, private or unlisted company right ?? But in case of Rotation of Auditor there are certain classes of company which are exempted . in one of the clause it states Rotation is not applicable for small companies and opc.

My question is in one of my Company Paid up cap is 51lacs does rotation applicable to my company

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BIPIN (CA ) (82 Points)
Replied 31 August 2016

Following condition has fulfill for rotation of auditor
Section 139(2) of the Act prohibits the following categories of companies from appointing / reappointing an audit firm for more than 2 terms of 5 consecutive years, i.e. 10 consecutive years, after which such company would be required to mandatorily rotate its auditors in accordance with the Act:

(i) listed companies;

(ii) unlisted public companies having a paid-up share capital of INR 10 crores or more;

(iii) all private limited companies having a paid-up share capital of INR 20 crores or more; and

(iv) all companies (private and public) which do not meet the thresholds mentioned in (ii) and (iii) above, but have public borrowings from banks / financial institutions or public deposits of more than INR 50 crores.