Auditors Re-appointment
This query is : Resolved
22 April 2023
Hello Experts!
I have a small question i.e.
Do we need to re-appoint an auditor in the same AGM where his tenure is completed? Considering he is eligible for reappointment.
For example: Mr Anmol & Co. an Audit Firm, was appointed as the auditor of ZEN Pvt Ltd in AGM on 30.09.2018 and as per the rules he will hold office till the conclusion of the sixth AGM i.e. AGM to be held in the calendar year 2023 (Period 01.04.2018 to 31.03.2023). For the sixth AGM to be held on, let's say 31.07.2023, Do we need to pass a resolution for him to be reappointed in the same AGM. To be more specific, do need to reappoint him in the same AGM where his tenure is getting completed?
Now if the answer is no, then when we should convene a Board Meeting and thereafter hold AGM for such reappointment? By when he shall be reappointed?
I have a small question i.e.
Do we need to re-appoint an auditor in the same AGM where his tenure is completed? Considering he is eligible for reappointment.
For example: Mr Anmol & Co. an Audit Firm, was appointed as the auditor of ZEN Pvt Ltd in AGM on 30.09.2018 and as per the rules he will hold office till the conclusion of the sixth AGM i.e. AGM to be held in the calendar year 2023 (Period 01.04.2018 to 31.03.2023). For the sixth AGM to be held on, let's say 31.07.2023, Do we need to pass a resolution for him to be reappointed in the same AGM. To be more specific, do need to reappoint him in the same AGM where his tenure is getting completed?
Now if the answer is no, then when we should convene a Board Meeting and thereafter hold AGM for such reappointment? By when he shall be reappointed?
06 July 2024
In the scenario you've described, where Mr. Anmol & Co. was appointed as the auditor of ZEN Pvt Ltd in the AGM held on 30.09.2018, and their term is set to conclude at the sixth AGM in the calendar year 2023, here’s how you should approach the reappointment:
1. **AGM for Reappointment:** Typically, you do not need to reappoint the auditor in the same AGM where their term concludes, provided they are eligible and willing to be reappointed. The term "until the conclusion of the sixth AGM" means they can continue until the end of that AGM without needing a reappointment resolution in the same meeting.
2. **Convening a Board Meeting:**
- **Before the Sixth AGM (by 31.07.2023):** Convene a board meeting well before the sixth AGM (scheduled for 31.07.2023 in your example). During this board meeting:
- Discuss the performance and suitability of Mr. Anmol & Co. as auditors.
- Obtain their consent and an eligibility certificate as per Section 141 of the Companies Act, 2013.
- Pass a resolution recommending their reappointment to the shareholders for approval in the upcoming AGM.
3. **AGM for Shareholder Approval:**
- Hold the AGM on or before 31.07.2023 (the date of the sixth AGM).
- Include the resolution for reappointment of auditors (Mr. Anmol & Co.) in the agenda of the AGM.
- Seek approval from the shareholders for the reappointment of Mr. Anmol & Co. as auditors of the company.
4. **Filing Form ADT-1:**
- Within 15 days of the AGM, file Form ADT-1 with the Registrar of Companies (ROC) to inform them about the reappointment of auditors.
By following these steps, you ensure compliance with the Companies Act, 2013, regarding the reappointment of auditors. This approach allows for a smooth transition and continuation of audit services without interruption at the conclusion of their term in the sixth AGM.
1. **AGM for Reappointment:** Typically, you do not need to reappoint the auditor in the same AGM where their term concludes, provided they are eligible and willing to be reappointed. The term "until the conclusion of the sixth AGM" means they can continue until the end of that AGM without needing a reappointment resolution in the same meeting.
2. **Convening a Board Meeting:**
- **Before the Sixth AGM (by 31.07.2023):** Convene a board meeting well before the sixth AGM (scheduled for 31.07.2023 in your example). During this board meeting:
- Discuss the performance and suitability of Mr. Anmol & Co. as auditors.
- Obtain their consent and an eligibility certificate as per Section 141 of the Companies Act, 2013.
- Pass a resolution recommending their reappointment to the shareholders for approval in the upcoming AGM.
3. **AGM for Shareholder Approval:**
- Hold the AGM on or before 31.07.2023 (the date of the sixth AGM).
- Include the resolution for reappointment of auditors (Mr. Anmol & Co.) in the agenda of the AGM.
- Seek approval from the shareholders for the reappointment of Mr. Anmol & Co. as auditors of the company.
4. **Filing Form ADT-1:**
- Within 15 days of the AGM, file Form ADT-1 with the Registrar of Companies (ROC) to inform them about the reappointment of auditors.
By following these steps, you ensure compliance with the Companies Act, 2013, regarding the reappointment of auditors. This approach allows for a smooth transition and continuation of audit services without interruption at the conclusion of their term in the sixth AGM.
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