Auditor disqualification

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CA. Ritesh Bafna

PROPRIETOR

145 Points Joined September 2014

Hello , Auditor is disqualified ( director is relative) to be re appointed at agm. anothet auditor's is to be appointed at agm. on this scenerio please help on the following points 1. special notice required? 2. special or ordinary resolution? and should the same be filled woth roc in mgt 14. 3. can all this business be taken up in an agm or should auditor resign due to disqualification, board fills the CV (no egm required as removal not due to voluntary resignation) the same is passed as ordinary resolution in agm? should you think of a different approach then pls provide proper flow of events along with the forms to be uploaded. all the queries based on companies act 2013 thank you for the help. regards

Replies (5)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

If the auditor is disqualified, how he was appointed as auditor? If he incurred the disqualification after he was appointed as auditor, he vacates the office immediately and there is casual vacancy u/s 141(4) which can be filled by the Board u/s 139(8)(i).

CA. Ritesh Bafna

PROPRIETOR

145 Points Joined September 2014

thank you for the reply yes the disqualification was after appointment. so in this situation at the agm is it necessary to pass a special resolution to appoint the auditor which is appoited by board to fill the CV? or a ordinary resolution will suffice.?

CA. Ritesh Bafna

PROPRIETOR

145 Points Joined September 2014

Agrawal sir,

if can also comment if the outgoing Auditor needs to file ADT 3 as the same is not a resignation.?

thank you

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

1) Appointment of auditors is always an ordinary business and not special business. [Ref. Sec.102(2)(a)(iv)].

2) Appointment of auditor requires ordinary resolution in following cases:

a) Appointment at AGM for 5 years [Sec.139(1) & Rule 3(7)]

b) Appointment of first auditors by EGM if the Board fails to appoint [Sec.139(6)]

c) Appointment of auditor to fill casual vacancy due to rsignation [Sec.139(8)]

d) Appointment of a retiring auditor as auditor. [Sec.140(4)].

3) Appointment of auditor other than retiring auditor or resolution that the retiring auditor shall not be reappointed requires special resolution. [Sec.139(9)(c)].

4) In the given case ordinary resolution is required for appointment of auditor in AGM of a person who was appointed by the Board to filll casual vacancy.

5) The given case is not a case of resignation and hence ADT.3 is not required to be filed.