Appointment of auditor as director
This query is : Open
18 October 2012
Can a Statutory Auditor of a Company after his resignation be immediately appointed on the Board of that Company?
18 October 2012
Yes, But Only After Retirement of Auditor, He Can be Appointed as Director.
18 October 2012
thank you ayush, but can you tell me is there any condition in companies act, 1956 where it is stated that for a particular period of time i.e. 3 years after his resignation he cannot be appointed as director?
18 October 2012
Hi
It will apply when you appoint him in a listed public company as Independent Director .
Clause 49 of Listing Agreement:
iii. For the purpose of the sub-clause (ii), the expression ‘independent director’ shall mean a non-executive director of the company who:
a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director;
b. is not related to promoters or persons occupying management positions at the board level or at one level below the board;
c. has not been an executive of the company in the immediately preceding three financial years;
d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following:
i. the statutory audit firm or the internal audit firm that is associated with the company, and
ii. the legal firm(s) and consulting firm(s) that have a material association with the company.
e. is not a material supplier, service provider or customer or a lessor or lessee of the company, which may affect independence of the director;
f. is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares.
g. is not less than 21 years of age
It will apply when you appoint him in a listed public company as Independent Director .
Clause 49 of Listing Agreement:
iii. For the purpose of the sub-clause (ii), the expression ‘independent director’ shall mean a non-executive director of the company who:
a. apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director;
b. is not related to promoters or persons occupying management positions at the board level or at one level below the board;
c. has not been an executive of the company in the immediately preceding three financial years;
d. is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following:
i. the statutory audit firm or the internal audit firm that is associated with the company, and
ii. the legal firm(s) and consulting firm(s) that have a material association with the company.
e. is not a material supplier, service provider or customer or a lessor or lessee of the company, which may affect independence of the director;
f. is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares.
g. is not less than 21 years of age
19 October 2012
Thank you Mr. Ajay but apart from this provisions is there any other provision in companies act or rules?
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