Partner as well ad managing director

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This query is : Resolved

CA GOPAL.T.JOSHI (Querist)

29 September 2011 can a person who is partner in an LLP firm can he be the managing director of an private ltd co.and can the same firm do the audit of the co. in which he is the managing director.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

30 September 2011 I am assuming that the person is a CA and he is a partner in a CA firm.(Only a CA firm can carry out audits)

Clause 11 of Part I of the First Schedule to the CA Act prohibits a practicing CA to be a managing or whole time director in any Company.

Clause 4 of Part I of the Second Schedule to the CA Act prohibits a practicing CA to express his opinion on any financial statements of an enterprise in which, inter alia, he is a director.

So, a CA who is a partner in a firm can be a director in a Co, but he cannot me MD or whole time director.

Further, his CA firm cannot conduct the audit of the Co. in which he is a director.

RG - A Helping Hand

RG - A Helping Hand (Expert)

30 September 2011 Agree with Expert.

The firm above is disqualified to do the audit work bcoz it affects the independence of firm adversely due to common person/partner.

Further MDship is a full time job so I would not suggest you to appoint him as MD. However he may be a director.

RG

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