Filing of notice of appointment of auditor companies act 13

Under Companies Act 2013, the company is required to intimate the Registrar about the appointment of auditor.

Once appointed, the auditor holds office for 5 consecutive years.

Grace period of 3 years is provided to fall in line.

Query No. 1 - A private limited company has had the same statutory auditor which has already held office for more than 5 years. Appointment is due now for FY 2014-15 and 5 years thereafter with Companies Act 2013 being in force and applicable. If the same auditor is appointed, he will hold office for 5 years at a stretch. But then, this would violate the law that same auditor should not be appointed. Then, how do we comply within the 3 years grace provided? What is the way around this?

Query No. 2 - Managing Director was authorized to sign papers for appointment of auditor by resolution held while Companies Act 1956 was in force. Does a fresh resolution needs to be passed for authorizing the Managing Director to sign Form ADT-1? Whether resolution needs to be passed in AGM/EOGM?

Kindly share your knowledge and throw some light on the above matters.

Regards

Dear Mr.Afshin

Section 139(1) provides that every company shall appoint their auditors for a period of five years. Hence this Section is applicable to all companies. Section 139(2) provides for rotation of auditors. Rotation of auditors is applicable only to specified type of companies. See the prescribed rules.

Please check whether the private company you are talking about falls under the provisions of rotation of auditors. If rotation is not applicable, you can appoint the auditors for a periof of five years at the AGM held in the year 2014.

If rotation is applicable and if the statutory auditor is a firm of auditors, then you can appoint them for next five years after which they would vacate office.

with regards

Muralidharan