Removal of Auditors
This query is : Resolved
14 March 2011
The case is regarding a pvt; ltd. co. Mr. X is the auditor of the co. since inception in 1986.
Now the directors want to remove Mr.X for their own vested interest.
The date of last AGM was 30.09.2009. for the year 2008-09 wher Mr.X was reappointed.
The next AGM date is fixed by the directors as 29.03.2011. for the F.Y.2009-10.
The notice of the AGM contains agenda of removing Mr.X and appointing Mr.Y as auditor.
Now who will be the auditor for the F.Y.2009-10?
Can Mr. x be removed all of a sudden and Mr. Y is appointed as auditor?
What is the right procedure of doing such.
Now the directors want to remove Mr.X for their own vested interest.
The date of last AGM was 30.09.2009. for the year 2008-09 wher Mr.X was reappointed.
The next AGM date is fixed by the directors as 29.03.2011. for the F.Y.2009-10.
The notice of the AGM contains agenda of removing Mr.X and appointing Mr.Y as auditor.
Now who will be the auditor for the F.Y.2009-10?
Can Mr. x be removed all of a sudden and Mr. Y is appointed as auditor?
What is the right procedure of doing such.
14 March 2011
Can u please let me know the financial year of the Company ends on 31st March or any other date?
14 March 2011
On 30.09.2009, u must have appointed Mr. X as the Statutory Auditor of the Company for the financial year 2009-10. The AGM of the Company for the financial year 2009-10 was held on 29.03.2011. On 29.03.2011 u will be appointing Mr. Y as the Statutory Auditor of the Company for the financial year 2010-2011.
Follow the procedure provided under section 225 of the Companies Act, 1956 for appointing an auditor other than an auditor retiring by rotation or to expressly resolve that the retiring auditor shall not be re-appointed.
God Bless
CS Udit Sharma
Follow the procedure provided under section 225 of the Companies Act, 1956 for appointing an auditor other than an auditor retiring by rotation or to expressly resolve that the retiring auditor shall not be re-appointed.
God Bless
CS Udit Sharma
15 March 2011
The financial year of the co. ends on 31 st march.
can the auditor for the f.y. 2010-11 be appointed in place of Mr. x on 29.3.2011?
can the auditor for the f.y. 2010-11 be appointed in place of Mr. x on 29.3.2011?
21 July 2025
Here’s the correct procedure under Companies Act, 1956, considering the facts:
Facts Recap:
Auditor Mr. X was reappointed at AGM held on 30.09.2009 for FY 2009-10.
Next AGM fixed on 29.03.2011 for FY 2009-10.
Directors want to remove Mr. X and appoint Mr. Y at the AGM on 29.03.2011.
Financial year ends 31st March.
Who is the auditor for FY 2009-10?
Mr. X remains the statutory auditor for FY 2009-10 because he was validly appointed in the AGM held on 30.09.2009.
He holds office until the conclusion of the AGM that approves the accounts for FY 2009-10 (the AGM on 29.03.2011).
Can Mr. X be removed suddenly?
No, Mr. X cannot be removed abruptly before the expiry of his term.
Removal of auditor before expiry requires prior approval of the Central Government (CG) under Section 225(1A) of Companies Act, 1956 (now Section 140 under Companies Act, 2013).
The company must file an application to CG for approval to remove Mr. X.
Can Mr. Y be appointed as auditor on 29.03.2011 for FY 2009-10?
No, appointment on 29.03.2011 can only be for the next financial year (FY 2010-11).
At the AGM on 29.03.2011, members can appoint Mr. Y as auditor from that AGM onwards (i.e., for FY 2010-11).
The appointment is for the new term and cannot be retrospective.
Facts Recap:
Auditor Mr. X was reappointed at AGM held on 30.09.2009 for FY 2009-10.
Next AGM fixed on 29.03.2011 for FY 2009-10.
Directors want to remove Mr. X and appoint Mr. Y at the AGM on 29.03.2011.
Financial year ends 31st March.
Who is the auditor for FY 2009-10?
Mr. X remains the statutory auditor for FY 2009-10 because he was validly appointed in the AGM held on 30.09.2009.
He holds office until the conclusion of the AGM that approves the accounts for FY 2009-10 (the AGM on 29.03.2011).
Can Mr. X be removed suddenly?
No, Mr. X cannot be removed abruptly before the expiry of his term.
Removal of auditor before expiry requires prior approval of the Central Government (CG) under Section 225(1A) of Companies Act, 1956 (now Section 140 under Companies Act, 2013).
The company must file an application to CG for approval to remove Mr. X.
Can Mr. Y be appointed as auditor on 29.03.2011 for FY 2009-10?
No, appointment on 29.03.2011 can only be for the next financial year (FY 2010-11).
At the AGM on 29.03.2011, members can appoint Mr. Y as auditor from that AGM onwards (i.e., for FY 2010-11).
The appointment is for the new term and cannot be retrospective.
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