CS Divesh Goyal
Quick Summary
SHORT SUMMARY Removal of a Statutory Auditor before completion of his term is a sensitive and highly regulated corporate action. The Companies Act, 2013 does not permit arbitrary removal of auditors. Instead, it prescribes a strict legal procedure to safeguard auditor independence and uphold corpor
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FAQ :
Under Section 140(1) of the Companies Act, 2013, removing a statutory auditor before their term requires passing a Special Resolution by shareholders and obtaining prior approval from the Central Government (delegated to the Regional Director).
Yes, the auditor must be given a reasonable opportunity of being heard. They must be informed about the removal proposal and have the chance to present their case, including at the General Meeting.
Key forms include Form MGT-14 for filing the Special Resolution with the ROC, Form ADT-2 for applying to the Regional Director for removal approval, and Form INC-28 for filing the RD's order with the ROC.
No, the prior approval of the Regional Director is mandatory. A Special Resolution passed by shareholders without the RD's approval is invalid.
Form MGT-14 must be filed within 30 days of passing the Special Resolution. Form ADT-2 must be filed with the Regional Director within 30 days of passing the Special Resolution.
Yes, the Regional Director can reject the application if the reasons for removal are inadequate or if the company fails to meet legal requirements and procedural steps.
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