Maximum tenor of statutory auditor (Financial)

We are a Private Limited Company and the same auditor is working since 30.3.2017.

Is there a cap -5 years in case of Pvt Ltd co?

Please guide

Replies (2)
Quick Summary
In the UK, a Private Limited Company's statutory auditor, whether an individual or an audit firm, has a maximum tenure of five consecutive years. If an individual auditor has served for five years, they cannot be reappointed to the same company for another five years. For audit firms, the limit is two terms of five consecutive years. It's crucial to rotate auditors to comply with the Companies Act 2013.

Yes, there is a cap on the tenure of an auditor in a Private Limited Company. As per the Companies Act 2013, an auditor can serve a private limited company for a maximum of 5 consecutive years. This means that your current auditor, who has been serving since 30.03.2017, has already completed 5 years and is due for rotation. Section 139(2) of the Companies Act 2013 states that: "No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint— (a) an individual as auditor for more than one term of five consecutive years; and (b) an audit firm as auditor for more than two terms of five consecutive years: Provided that an individual auditor who has completed his term under this section shall not be eligible for re-appointment as auditor in the same company for a period of five years from the completion of his term." However, it's important to note that this restriction does not apply to private limited companies that are not listed or do not fall under the prescribed classes. But, it's always best to check with the Companies Act or consult with a legal/financial expert to confirm the specific requirements applicable to your company. In your case, since your auditor has already completed 5 years, it's recommended to rotate the auditor to ensure compliance with the Companies Act. You may want to consider appointing a new auditor or seeking

Sir

 

In our Pvt Ltd Co, it is audit firm. However, only one partner is signing more than 6 years consecutively. 

Kindly guide 

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