Removal of auditor

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This query is : Resolved

Priyanka (Querist)

04 October 2017 Hello,

My query is about removal of First Auditor.
Is removal of First Auditor or appointing a different auditor at first AGM requires a special resolution to be passed and filing of MGT-14 and ADT-2 accordinngly. Please suggest.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

04 October 2017 Yes.

REMOVAL of Auditor BEFORE EXPIRY OF TERM-Section 140(1) read with Rule 7
Special Resolution in General Meeting.
• Previous Approval of the Central Government should be obtained by filing Form ADT-2.
• Reasonable opportunity of being heard is given to the Auditor.Special Resolution in General Meeting.

Priyanka

Priyanka (Querist)

05 October 2017 Thank you for reply sir,

But term of first auditor is upto First AGM. Will it be considered as removal if we want to appoint another auditor in First AGM.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

05 October 2017 Yes. The case is Removal of auditor on expiry of terms. In such case as per section 140(4) of the Companies act, 2013 where a person other than the retiring auditor is proposed to be appointed as an auditor or where it is proposed that the retiring auditor shall not be re-appointed, a special notice under Section 115 of the companies Act, 2013 has to be given proposing that such a resolution would be moved at the next annual general meeting.Copy of such resolution shall be sent to the Auditor. Representation by auditor, if any, shall be either sent to the members or read out at the meeting. In the general meeting, the appointment will be considered and the necessary resolution be passed

Priyanka

Priyanka (Querist)

05 October 2017 But Form ADT-2 or approval of CG is required in case of removal BEFORE THE EXPIRY OF TERM as per section 140(1).
and this is the case of REMOVAL AT TERM and Section 140(4)(i) says for special notice and representation by auditor.

So that means only special notice and representation by auditor is required and there is no requirement of filings.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

06 October 2017 yes . Special notice and representation by auditor is required. Later you have to pass resolution in AGM

Priyanka

Priyanka (Querist)

10 October 2017 Thank you for your time sir.

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