Company auditor

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kanika goel (Querist)
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31 January 2016 At an AGM of a listed co. , Mr. R a retiring auditor after completing the tenure of 5 consecutive yrs of his service claims that he has been reappointed automatically, as the intended resolution of which a notice had been given to appoint Mr. P, could not be proceeded with, due to Mr. P's death. Claim of Mr. R would not hold good. How the vacancy could be filled up??

kanika goel

kanika goel (Querist)
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01 February 2016 can anyone help me??

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kanika goel

kanika goel (Querist)
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01 February 2016 pls help me in this problem.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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19 July 2024 In the scenario described, Mr. R, the retiring auditor of a listed company, claims that he has been reappointed automatically because the intended resolution to appoint Mr. P could not proceed due to Mr. P's death. However, Mr. R's claim of automatic reappointment is not valid under the Companies Act and the rules governing the appointment of auditors. Here’s how the vacancy can be properly filled up:

1. **Vacancy Due to Non-Appointment of Mr. P:**
- Since Mr. P's appointment could not proceed due to his death, the position of auditor is considered vacant.

2. **Procedure for Filling the Vacancy:**
- The vacancy of the auditor should be filled as per the provisions of the Companies Act, 2013, and the rules framed thereunder.
- Typically, the board of directors of the company would need to convene a board meeting to discuss and decide on the appointment of a new auditor.
- The board should propose the appointment of a new auditor and seek approval from the shareholders at the next general meeting.

3. **Appointment of New Auditor:**
- The appointment of a new auditor requires passing of a resolution by the shareholders at a general meeting.
- The proposed resolution for appointment of the auditor should be included in the notice convening the general meeting, along with relevant details about the new auditor (e.g., name, qualifications, experience).

4. **Compliance and Notification:**
- The appointment of the new auditor should be communicated to the Registrar of Companies (RoC) within the prescribed timeline, as per the Companies Act.
- Any necessary disclosures regarding the appointment should also be made in the company's financial statements and other statutory filings.

5. **Rectifying Mr. R's Claim:**
- Mr. R's claim of automatic reappointment should be addressed and clarified by the board and management of the company.
- It should be made clear to Mr. R that his tenure has ended as per the applicable rules, and the company is required to appoint a new auditor through the proper process.

In conclusion, the vacancy caused by the non-appointment of Mr. P due to his death must be filled by following the prescribed procedures under the Companies Act, 2013. Mr. R's claim of automatic reappointment is not legally valid, and therefore, the company should proceed to appoint a new auditor through the correct channels as outlined above.

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