Doubt on company law

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CA Sahil Singla.. (Querist)
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08 October 2011 Experts

Co. Act 1956 says that no special notice is required for the removal of Auditors before the expiry of their Term. But it says that Sec 225(2) & (3) must be complied with, according to which notice is required to be sent to the Auditors.

1. What is the difference b/w this special notice & notice referred in 225(2), (3) ?

2. Are there any situations under which SPECIAL Notice is required for the removal of Auditors ?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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10 October 2011 Section 225 applies to 2 cases;
1. for a resolution at an AGM appointing as auditor a person other than a retiring auditor

2. providing expressly that a retiring auditor shall not be re-appointed. in this case procedure specified in Sec 190 & also in sub-section (2) & (3) must be complied with.

If a new auditor is to be appointed in place of the retiring auditor at an AGM, the company must receive a special notice of the intended resolution and in turn give a notice thereof to its members. The company must give intimation to the retiring auditor of the intended resolution by sending a copy of the special notice received by it.

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CA Sahil Singla..

CA Sahil Singla.. (Querist)
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10 October 2011 sir

U said that "if new auditor is to be appointed in place of ...."

But in case of removal before expiry of term, we also appoint new auditor ? So ,does this mean that it is exeption that 225(2) & (3) does not apply in removal before expiry ?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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10 October 2011 No.

Besides, according to sub-section (4), sub-sections (2) & (3) shall apply to a resolution to remove the first auditor under 224(5) or to the removal of any auditor under 224(7), as they apply in relation to a resolution that a retiring auditor shall not be re-appointed.

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