Company law
This query is : Resolved
28 November 2015
In case of failure to appoint/Reappointment of auditor in agm existing auditor shall be continue.
Whther thses provisons are applicable on prescribed co.under rule 5?
If yes ,it is proviso of sec 139(1).?
Whther thses provisons are applicable on prescribed co.under rule 5?
If yes ,it is proviso of sec 139(1).?
28 November 2015
Plz resolve as early as possible
19 July 2024
Yes, the provisions regarding the continuation of the existing auditor in case of failure to appoint or reappoint them at the AGM are applicable to prescribed companies under Rule 5 of the Companies (Audit and Auditors) Rules, 2014. Here’s a detailed explanation:
### Provisions of Section 139(1) and Rule 5:
1. **Section 139(1) of the Companies Act, 2013:**
- Section 139(1) specifies the requirement for every company to appoint or reappoint an auditor at each AGM.
- If a company fails to appoint or reappoint an auditor at the AGM, the existing auditor continues until such appointment is made.
2. **Rule 5 of the Companies (Audit and Auditors) Rules, 2014:**
- Rule 5 provides detailed procedures and requirements for the appointment and reappointment of auditors by companies.
- It includes provisions on the duration of appointment, rotation of auditors, and the powers of the Board of Directors and shareholders in appointing auditors.
### Applicability to Prescribed Companies:
- **Prescribed Companies:** These are companies to which specific rules and regulations apply as per the Companies Act, 2013 and related rules.
- **Rule 5 and Proviso to Section 139(1):**
- Rule 5 aligns with the proviso to Section 139(1), ensuring that if a prescribed company fails to appoint or reappoint an auditor at the AGM, the existing auditor continues in office until the appointment is made.
- This ensures continuity in the audit process and compliance with statutory requirements regarding audit.
### Conclusion:
- Yes, the provisions for the continuation of the existing auditor in case of failure to appoint or reappoint them at the AGM apply to prescribed companies under Rule 5.
- These provisions are in accordance with the proviso to Section 139(1) of the Companies Act, 2013, ensuring that there is no disruption in the auditing process even if the appointment or reappointment is delayed due to any reason.
In summary, prescribed companies must adhere to Rule 5 and the proviso to Section 139(1), ensuring timely appointment or reappointment of auditors at AGMs to comply with audit and compliance requirements under the Companies Act, 2013.
### Provisions of Section 139(1) and Rule 5:
1. **Section 139(1) of the Companies Act, 2013:**
- Section 139(1) specifies the requirement for every company to appoint or reappoint an auditor at each AGM.
- If a company fails to appoint or reappoint an auditor at the AGM, the existing auditor continues until such appointment is made.
2. **Rule 5 of the Companies (Audit and Auditors) Rules, 2014:**
- Rule 5 provides detailed procedures and requirements for the appointment and reappointment of auditors by companies.
- It includes provisions on the duration of appointment, rotation of auditors, and the powers of the Board of Directors and shareholders in appointing auditors.
### Applicability to Prescribed Companies:
- **Prescribed Companies:** These are companies to which specific rules and regulations apply as per the Companies Act, 2013 and related rules.
- **Rule 5 and Proviso to Section 139(1):**
- Rule 5 aligns with the proviso to Section 139(1), ensuring that if a prescribed company fails to appoint or reappoint an auditor at the AGM, the existing auditor continues in office until the appointment is made.
- This ensures continuity in the audit process and compliance with statutory requirements regarding audit.
### Conclusion:
- Yes, the provisions for the continuation of the existing auditor in case of failure to appoint or reappoint them at the AGM apply to prescribed companies under Rule 5.
- These provisions are in accordance with the proviso to Section 139(1) of the Companies Act, 2013, ensuring that there is no disruption in the auditing process even if the appointment or reappointment is delayed due to any reason.
In summary, prescribed companies must adhere to Rule 5 and the proviso to Section 139(1), ensuring timely appointment or reappointment of auditors at AGMs to comply with audit and compliance requirements under the Companies Act, 2013.
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