Appointment of auditor other than retiring auditor

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Naresh Kumar (Querist)
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21 June 2016 Dear Sir,

A auditor was appointed in for a single financial year e.g. 01 April 2015 to 31.03.16. Now the management wants to change the auditor in next financial year as the term of existing auditor has been expired.

If, I gone plainly, with the provisions of Companies Act 2013 or even Companies Act 1956, in case of appointment of new auditor other than RETIRING AUDITOR, special notice need to be given.

My question is :

1. what is the interpretation of retiring Auditor.
2. If a auditor whose term has been expired after the end of financial year then is it a burden on the company to appoint that existing auditor again.
3. Should I need to give special notice to said auditor whose term has been expired and we no longer need to appoint again.

Please also quote some legal issues based in issue if any.

Views of all my respected senior are solicited.

Thanks and warm Regards
Naresh K Sharma

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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22 June 2016 Kindly note that as per Section 139(1) of the companies Act, 2013 the appointment of auditors shall be made for a 5 year term subject to ratification at every AGM. If appointment is not ratified, the Board shall have the powers to appoint an auditor after following prescribed procedure within 30 days.

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)
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22 June 2016 As per S.139 of Companies Act, 2013 an auditor has to be appointed for a period of 5 years and 10 years in case of partnership firm . Thus, in this context, the retiring auditor is a person whose term has expired. Certain companies cannot cannot appoint retiring auditor for period of next 5 years. As per S.140 of Companies Act, 2013 special resolution is required to be passed if the auditor is removed before the expiry of 5 / 10 years.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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