REGARDING STATUTORY AUDIT of a private company
This query is : Resolved
18 December 2025
if a company has appointed in its 1st agm held on 9.12.2024 auditor (sole proprietorship firm) for a period of 5 years till 2029 agm . further the auditor so appointed has merged with a partnership firm loses his former existence and emerge in the new name in the fy 2024-25 then who will audit the accounts of fy 2024-25 of the company and the whole process which a company needs to undergo
20 December 2025
The new partnership firm can audit the accounts only if it is appointed by the company.
• Until such appointment is regularized, the old firm (which has ceased to exist) cannot sign the audit report.
• Practically, the company must fill the casual vacancy caused by the merger.
• Until such appointment is regularized, the old firm (which has ceased to exist) cannot sign the audit report.
• Practically, the company must fill the casual vacancy caused by the merger.
20 December 2025
Here’s the compliance roadmap:
1. Board Meeting
• Place the matter before the Board.
• Approve appointment of the new partnership firm as auditor in place of the sole proprietorship firm.
• Fix date of EGM (if required).
2. Casual Vacancy Rules (Section 139(8)):
• If the vacancy is due to resignation → Board recommends, shareholders approve in General Meeting within 3 months.
• If due to other reasons (like merger/closure) → Board can fill the vacancy, but appointment must be ratified in the next AGM.
3. Filing with ROC
• File Form ADT-1 within 15 days of appointment of the new auditor.
4. Documentation
• Obtain consent letter and eligibility certificate from the new firm (per Section 141).
• Maintain explanatory note in Board minutes about merger and cessation of old firm.
• Keep copy of resignation/merger intimation from old auditor.
1. Board Meeting
• Place the matter before the Board.
• Approve appointment of the new partnership firm as auditor in place of the sole proprietorship firm.
• Fix date of EGM (if required).
2. Casual Vacancy Rules (Section 139(8)):
• If the vacancy is due to resignation → Board recommends, shareholders approve in General Meeting within 3 months.
• If due to other reasons (like merger/closure) → Board can fill the vacancy, but appointment must be ratified in the next AGM.
3. Filing with ROC
• File Form ADT-1 within 15 days of appointment of the new auditor.
4. Documentation
• Obtain consent letter and eligibility certificate from the new firm (per Section 141).
• Maintain explanatory note in Board minutes about merger and cessation of old firm.
• Keep copy of resignation/merger intimation from old auditor.
20 December 2025
Treat this as a casual vacancy and follow Section 139(8).
• Ensure timely filing of ADT-1 and proper documentation to avoid audit objections.
• Communicate clearly in Notes to Accounts/Audit Report about the change in auditor due to merger.
• Ensure timely filing of ADT-1 and proper documentation to avoid audit objections.
• Communicate clearly in Notes to Accounts/Audit Report about the change in auditor due to merger.
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