Rotation of auditors applicability
This query is : Resolved
06 August 2016
As per Sec.139(2) of Companies Act,2013 read with Rule of Companies(Audit and Auditors) Rules, 2014, rotation of auditors apply even to the Pvt. Ltd. Companies if their paid-up capital is 20 crores or more.
So for example, a Pvt. Ltd. Company is incorporated on 01/04/2014 and is having the same auditor (an individual) right from incorporation and it increases its paid-up capital to 21 crores on 31/07/2019. Can it appoint the same auditor for 5 more years or only for 1 year?
To put it simply, applicability of provisions pertaining to rotation of Auditor starts only from the year in which the condition is satisfied or even the previous period in which a person is an auditor needs to be counted?
So for example, a Pvt. Ltd. Company is incorporated on 01/04/2014 and is having the same auditor (an individual) right from incorporation and it increases its paid-up capital to 21 crores on 31/07/2019. Can it appoint the same auditor for 5 more years or only for 1 year?
To put it simply, applicability of provisions pertaining to rotation of Auditor starts only from the year in which the condition is satisfied or even the previous period in which a person is an auditor needs to be counted?
08 August 2016
The Act will be applicable prospectively. Thus the previous year situation will not be taken into consideration.
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