Re-appointment of statutory auditor in private limited company

if paid up capital of the Company is Rs. 20 crore or more or even though paid up capital is less the 20 cores but having public borrowing from financial institution, banks or public deposits of iRs. 50 cores or more. shall not appoint or reappoint-

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.

the period for which the individual or the firm has held office as audiotr prior to the commencment of the Act shall be taken into account for calculating the period of five year consecutive years or 10 years consecutive years as case may, it means that your company falls under limits prescribed above and your company has same audit firms from 7 years, you can appoint the firm only for period of 3 years. 

if paid up capital of the Company is Rs. 20 crore or more or even though paid up capital is less the 20 cores but having public borrowing from financial institution, banks or public deposits of iRs. 50 cores or more. shall not appoint or reappoint-

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.

the period for which the individual or the firm has held office as audiotr prior to the commencment of the Act shall be taken into account for calculating the period of five year consecutive years or 10 years consecutive years as case may, it means that your company falls under limits prescribed above and your company has same audit firms from 7 years, you can appoint the firm only for period of 3 years. 

Hello Prakash,

An auditor can be reappointed in a private companyafter the expiry of period of 5 years provided if your company is a small company or OPC.

 However, If your company falls under any of the following categories you cannot appoint same Individual as auditor for more than 5 years or audit fim as auditor for more than two terms of five consecutive years

a. All Listed Companies

b. All Unlisted Public Comps having PUSC of Rs. 10cr or more.,

c. All Pvt Comps having PUSC of Rs.20cr or more.,

d. All Comps having PUSC of below thresold limit mentioned in (b) and (c) above, but having public borrowings from financial institutions, banks or public depostis of Rs. 50cr or more.

Please read section 139(2) and Rule 5 of Companies (Audit and Auditors) Rules, 2014.

Note: PUSC means Paid Up Share Capital

Regards,

Arjun Rajagopal