Auditors tenure in a private company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 March 2016 we are a private limited company with a paid up capital less than 20 Crores and our financial year starts from 1st Jan 2016 and end with 31st Dec 2016.

In the AGM we are planning to propose auditors appointment for one year . Please advise whether tenure needs to be 5 years even though our paid up capital is less than 20 crores .
Also from which year the new provisions would apply

prathiba

prathiba (Expert)
Follow

17 March 2016 Firstly, please note that after the commencement of the Companies Act, 2013 financial year in relation to any company or body corporate means the period ending on the 31st day of March every year, and in case of companies incorporated after Jan 1 of a year, the fin.year means the period ending on 31st march of the following year in respect of which financial statements of the company or body corporate are made up.

Regarding auditor appointment, after the commencement of the act , w.e.f 01.04.2014, every company shall at the first AGM, appoint an individual or a firm as auditors who shall hold office from the conclusion of that meeting till the conclusion of its sixth AGM. Hence, it is a mandatory provision.
At every subsequent AGM, the matter relating to auditor appointment shall be placed before AGM for ratification by members.
Hence, after one year , if you want to change the auditors, it can be done by way of shareholder resolution at AGM for appointment of new auditors . The ROC to be intimated accordingly by fiing ADT-1. Also the auditor who has resigned has to filed for ADT-3 with ROC.

Message likes : 1 times

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

17 March 2016 1. Financial year can't end on 31-12-2016. First F.Y should end necessarily on 31-3-2017.

2. First auditors has to be appointed by board of directors with in 30 days of incorporation. Their tenure ends at first AGM. Then in the 1st AGM, auditors to be appointed for 5 years, subject to ratification in 2nd to 5th AGM.

Ps :- the provision as in (1) and (2) above came into force from 1.4.2014.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now