Is there any trouble for the auditor?

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2014 Please Answer this question from the point of view of an Auditor.

Mr. X, a practicing Chartered Accountant of M/s. X Associates (being the individual Trade name of Mr.X), is appointed as an auditor of a private limited company on 1st September 2014.

On 15th November 2014, Mr. X intends to join a new Partnership with Mr. A, Mr. B & Mr.C who all hold practice in their individual trade name and who all now intend to set up a partnership firm.

Mr. A , Mr. B & Mr. C decide to surrender their individual trade name and start a new Partnership firm. They intend to accept Mr. X as a partner on the one condition that he must also surrender his individual trade name.

Now Mr. X seeks your advice to know whether can he accept the offer made to him by the partnership firm. What are the legal hurdles that he will face both from the point of view of The Companies Act, 2013 and The Chartered Accountants Act, 1949.

Mr.X also thinks that since he has to resign as an auditor of the private limited company, there would be some adverse impact from the Registrar of Companies or some sort of harassment to his client at a later date.

Though it must be noted that the partners of the firm do not object in Mr. X continuing to sign the financials of the private limited company. Is the concern of Mr. X legitimate.