Appointment, Ratification, Reappointment of Auditor as per companies act, 2013 with standard formats
Procedure for Appointment of Auditor
under Companies Act- 2013
BACKGROUND
It is inevitable that ‘dynamic environment
demands constant changes’. One
of such change had been made in the Companies Act by notifying the Companies
Act, 2013.
In the present article we deal with the provisions of the 2013
dealing with the Auditors of the Company. The auditors of a company play a
vital role towards the stakeholders of such company. The Auditors are required
to audit the books of accounts of the company and report to the shareholders
regarding the affairs of the Company which are carried out by the directors of the
Company in the fiduciary capacity
1.
PR PROCEDURE FOR APPOINTMENT OF AUDITOR:
Appointment of FIRST AUDITOR in case of every company except govt.
company or company owned/ controlled by CG/SG/CG and SG [139(6)]:-
§ The First auditor of a company, other than a Government
Company, shall be appointed by the BOARD OF DIRECTORS WITHIN THIRTY DAYS OF
THE DATE OF INCORPORATION of a company. The auditor so appointed,
shall hold office until the conclusion of the first annual general meeting.
§ IF THE BOARD FAILS to appoint the
first auditor, it shall inform the MEMBER of company, who shall within 90 days
at an Extra Ordinary General Meeting shall appoint auditor.
{There is different view of different persons,
persons have view that No time period is mentioned for Board to inform the
members about the Non appointment of first auditor.}
But According to my VIEW: If the Board fails to appoint the First
Auditor, an Extra Ordinary General meeting will be called by the Board to
appoint the first auditor within 90 days of incorporation.
In case of appointment of First auditor by
Board of Director of company pursuant to section 139(6), company is under no
obligation to give notice to appointment of First Auditor to the Registrar. THERE IS NO NEED TO FILE ANY FORM WITH ROC FOR APPOINTMENT OF FIRST
AUDITOR.
For the company incorporated after
01st April, 2014 first Auditor shall hold
office until the conclusion of the first annual general meeting of company.
2. A APPOINTMENT
OF AUDITOR AT FIRST ANNUAL GENERAL MEETING (AGM):
Every company shall at
First Annual General meeting (AGM) appoint an individual or firm as an Auditor
to hold office from the conclusion of that meeting till the conclusion of the
sixth (6th ) Annual General Meeting (AGM).
§ The duration of auditor of company will be
term of consecutive Five (5) years each for Individual and Two terms of
Consecutive Five (5) years in case of Auditor Firm.
** BUT the provision of 5 Year and 10 year will not applicable on
One Person Company and Small Companies as per Rule-5 The Companies (Audit and
Auditor) Rules, 2014.
3. M MATTER IN RESPECT OF FIRST APPOINTMENT AT
AGM:-
A. Ratification at Every Annual General Meeting
(AGM):- [First Proviso of Section-139 (1)]
Although the duration
of office is Five (5) years and Ten (10) years, the company will place the
matter for ratification at every AGM.
LANGUAGE OF NOTICE OF AGM (ORDINARY BUSINESS):
To re-appoint Statutory Auditors and fix their
remuneration and in this regard to consider and
if thought fit, to pass with or without modification(s) the following resolution as Ordinary Resolution:
if thought fit, to pass with or without modification(s) the following resolution as Ordinary Resolution:
Resolution:
“RESOLVED THAT pursuant to the
provisions of Section 139 and 142 of the Companies Act, 2013 read with Rule 3
of the Companies (Audit and Auditors) Rules, 2014, as amended from time to
time, M/s_____________, Chartered Accountants, having FRN No. based
at ____________based
at Laxmi Nagar, Vikas Marg, New Delhi -110092 be and is hereby re-appointed as the Statutory
Auditors of the Company for the financial year 2016-2017 and to hold office
from the conclusion of this Annual General Meeting until the conclusion of sixth
Annual General Meeting (subject to annual ratification by the Members at the
Annual General Meeting), and on such remuneration, fee and out of pocket
expenses as shall be fixed by the board of Directors of the Company in
consultation with Auditors.”
RESOLVED
FURTHER THAT any Director of
the company be and is here by authorized to file the e form ADT-1 with the
Registrar of Companies, Uttar Pradesh & Uttrakhand and to do all such acts,
deeds and things and execute such other documents as may be necessary for the
purpose of giving effect to this resolution.”
B. CONSENT AND CERTIFICATE FROM AUDITOR:- [Second
Proviso of Section-139 (1)]:
Documents Require from Auditor before
Appointment in AGM
→ WRITTEN CONSENT of auditor for such appointment.
→ CERTIFICATE from
auditor for such appointment.
→ Under Rule 4 of Chapter-X,
Auditor shall state in said certificate that he satisfy the condition given
below: (Third Proviso of Section- 139(1);
§ The individual or the firm, as the case may
be, is eligible for appointment and is not disqualified for
appointment under the Act, the Chartered Accountants Act, 1949 and the rules or
regulations made there under;
§ The proposed appointment is as per the term
provided under the Act;
§ The proposed appointment is within the limits
laid down by or under the authority of the Act;
§ The list of proceedings against the auditor or
audit firm or any partner of the audit firm pending with respect to
professional matters of conduct, as disclosed in the certificate, is true and
correct.
ACCORDING TO ME COMPANY
SHOULD ISSUE LETTER TO AUDITOR FOR HIS APPOINTMENT –FORMAT GIVEN BELOW
Procedure for Appointment of Auditor under Companies Act- 2013
C. INTIMATION
TO AUDITOR & NOTICE TO REGISTRAR
:- [Fourth Proviso of Section-139 (1)]:
The Company shall with
in Fifteen (15) Days of Annual General Meeting (AGM) :
§ Inform the Auditor of his Appointment.
§ File Notice of such appointment with ROC
in Form- ADT-1 [
*Earlier auditor used to file Form 23B and inform ROC, now the
company is to inform ROC, so in a way they shifted the burden to
inform on Company.
Appointment of first
auditor in case of govt. company or company owned/ controlled by CG/SG/CG and
SG139 (7):- Appointment of
first auditor shall be made by CAG within 60 days of registration of the
company. If CAG fails to appoint the first auditor within given time then Board
of such company shall appoint first auditor within 30 days. If Board fails to
appoint the first auditor within given time then it shall inform to members and
members shall make the appointment of first auditor within 60 days of
information at an EGM. The First Auditor shall hold office till the conclusion
of first AGM.
YOU MAY SEE THE
FOLLOWING TABLE SHOWING THE RELEVANT PROVISIONS RELATING TO APPOINTMENT OF
FIRST AUDITOR OF COMPANY.
|
||
S1
|
Which Section will
apply for appointment of First Auditor
|
Section 139(1)
|
2
|
Who will Appoint
First Auditor
|
Board of Directory
By Passing Board Resolution in Board Meeting
|
3
|
Time Limit for
Appointment of First Auditor
|
Within 30 days from
Incorporation of Company
|
4
|
Who will
Appoint Fist Auditor if Board of Director Fails to Appoint First
Auditor
|
Members of Company
by Passing of Ordinary Resolution in Extra Ordinary General Meeting
|
5
|
What is the Tenure
of Office of First Auditor?
|
First Auditor may
hold office until conclusion of First Annual General Meeting
|
6
|
Whether First
Auditor can be remove before First Annual General Meeting, If appointed in
Board Meeting.
|
Yes, By Board of
Directors
|
7
|
Whether First
Auditor can be remove before First Annual General Meeting, If appointed in
General Meeting.
|
Yes, by Members of
Company by Passing of Special Resolution, After obtaining the previous
approval of Central Government in that behalf
|
8
|
Whether First
Auditor can be Appoint Through AOA & MOA.
|
No, the Appointment
of First Auditor by the Articles of Company will not be valid.
|
APPOINTMENT OF
AUDITOR IN CASE OF RESIGNATION
DRAFT ATTACHED FORMATS
1. RESIGNATION LETTER BY AUDITOR
Date:
01/08/2015
To
The
Board of Directors
ABC
PRIVATE LIMITED
Jagadhri
Subject:
Resignation as Statutory Auditor of the Company
Dear
Sir
We are tendering herewith
our resignation as Statutory Auditor of the Company for the Financial Year
2014-15 due to our pre-occupation. So, we request you to accept our resignation
with immediate effect and acknowledge the same
For OLD AUDITOR
FIRM & Associates
Chartered
Accountants
CA XYZ
M. No.
FRN.
CONSENT LETTER AND CERTIFICATE FROM AUDITOR
AS PER SECTION-139 & 141 OF COMPANIES
ACT -2013
Date: 01/08/2015
To,
The Board of Directors
M/S.
ABC PRIVATE LIMITED
JAGADHRI,
YAMUNA NAGAR, 135003
Dear Sirs,
Ref: Consent & Certificate
for appointment as auditor under the Companies Act, 2013
We are in receipt of your
communication inquiring as to our consent and eligibility for being appointed
as statutory auditors of ABC PRIVATE LIMITED from the conclusion of
Extra Ordinary General Meeting to be held on 25/08/2015 till the conclusion of
the ensuing Annual General Meeting of the Company to be held in 2015. We give
our consent for being appointed as statutory auditor of the Company subject to
Shareholders’ approval.
Further, in pursuance of
requirement of section 139 of the Companies Act, 2013 and rule (4) of Companies
Audit and Auditors) Rules, 2014, we hereby confirm that:
1) The firm is eligible for appointment
and is not disqualified for appointment under section 141 of the Companies Act,
2013, the Chartered Accountant Act, 1949 and rules and regulations made there
under;
2) Our proposed appointment would
be as per the term provided under the Act;
3) The proposed appointment is
within the limits laid down by or under the authority of the Act;
4) There are no proceedings
pending against either of the partners or the firm with respect to professional
matters of conduct.
Thanking you,
Yours Sincerely,
For and Behalf of,
M/s NEW AUDITOR FIRM
Chartered Accountants
CA
M. No.
FRN No.
NOTICE
FOR CALLING EGM
Notice
is hereby given that the First Extra Ordinary General Meeting of FY 2015-16 of
the Members of ABC PRIVATE LIMITED will be held on Tuesday
25/08/2015 at 11.00 A.M. At Registered Office of the Company to transact the
following as Special business:-
SPECIAL
BUSINESS:
ITEM NO. I. To consider and, if
thought fit, to pass with or without modification the following as Ordinary resolution:
“RESOLVED THAT pursuant to the provisions of Section 139 (8) of the
Companies Act, 2013 and other applicable provisions of the Act, if any,
including any statutory modifications, amendments or re-enactments thereof, consent
of the Company be and is hereby accorded to appoint Mr. of M/s. NEW AUDITOR FIRM,
Chartered Accountants, Jagadhri (FRN: ICAI-012322N) as Statutory auditor of the
company who shall hold the office as statutory auditor till the conclusion of
ensuing General Meeting on such remuneration as may
be decided by the Board..
FURTHER RESOLVED THAT any
of the Board of Directors, be and is, hereby empowered and authorised to take
such steps, in relation to the above and to do all such acts, deeds, matters
and things as may be necessary, proper, expedient or incidental for giving
effect to this resolution and to file necessary E Forms with Registrar of
Companies.”
FOR
ABC PRIVATE LIMITED
DATE:
01/08/2015
PLACE:
Name
of Director
DIRECTOR/ Managing
DIN:
Address:
NOTES:
1.
a member entitled to attend and vote is entitled to
appoint a proxy to attend and vote instead of himself. the proxy need not be a
member of the company.
2.
The proxies to be effective should be deposited at the
registered office of the company not later than 48 hours before the
commencement of the meeting.
3.
The relevant Explanatory Statement in terms of Section
102 of the Companies Act, 2013 is enclosed herewith.
Explanatory
statement pursuant to section 102 of the companies act, 2013
Item
No. 1:
(a). As Mr. A of M/s. OLD
AUDITOR FIRM & Associates, Chartered Accountants, …..City has resigned on
01/08/2015 from post of Statutory Auditor of the Company. Hence, for the audit
of accounts of the company for the FY 2014-15, the Board proposed the name of
M/s. NEW AUDITOR FIRM, Chartered Accountants, ….City, (FRN: ICAI- ) to be appointed as Statutory
Auditor of the company pursuant to the provisions of Section 139 (8) of the
Companies Act, 2013. As the Board of Directors of a Company cannot, except with
the consent of Members in General Meeting by an ordinary resolution, appoint
any person as an Auditor of the Company. The Directors therefore, recommend the
Ordinary Resolution for approval of the shareholders.
(b). None of the Directors, Key Managerial Personnel of the Company or
their relatives or any of other officials of the Company is, in any way,
financially or otherwise, concerned or interested in the resolution.
FOR
ABC PRIVATE LIMITED
DATE:
01/08/2015
PLACE:
Name of
Director
DIRECTOR/ Managing
DIN:
Address:
BOARD RESOLUTION
FOR APPOINTMENT OF FIRST AUDITOR OF THECOMANY
CERTIFIED TRUE
COPY OF RESOLUTION PASSED BY THE BOARD OF DIRECTORS IN THEIR FIRST MEETING HELD
ON MARCH 21, 2016 AT 11.00A.M AT THE REGISTERED OFFICE OF THE COMPANY AT
(ADDRESS)
____________________________________________________________________________
The Chairman
informed that the first Auditors of the Company are to be appointed in the
Board Meeting within 30 days from the date of incorporation of the company. He
informed that he had got consent of, M/s__________________,
for their appointment as the first Auditors of the Company. The Board
considered and passed the following resolution unanimously:
“RESOLVED
THAT
pursuant to the provisions of the Section 139 and other provisions applicable,
if any, of the Companies Act, 2013, read with Companies (Audit and Auditors)
Rules, 2014, ___________________, having FRN No. based
at_______________ based at Laxmi Nagar,
Vikas Marg, New Delhi -110092 from whom a written
consent to act as first Auditor along with certificate pursuant to section
139(1) of the Companies Act, 2013, has been received, be and are hereby
appointed as the first auditors of the Company to hold office until the
conclusion of the first Annual General Meeting of the Company at
such remuneration as may be agreed between the Board and the said Auditors.
RESOLVED FURTHER
THAT Mr.
_______________, Director of the Company be
and is hereby severally authorized to file the necessary form with Registrar of
Companies and to intimate the Auditors of their Appointment and to do all other
acts, deeds, things which are necessary to give effect to the same.”
CERTIFIED
TRUE COPY OF RESOLUTION
FOR
ABC PRIVATE LIMITED
DATE:
25/08/2015
PLACE:
Name of Director
DIRECTOR/ Managing
DIN:
Address:
INTIMATION
LETTER TO NEW AUDITOR
March
16, 2016
To-
M/s
, __________________
Chartered
Accountants,
Laxmi
Nagar, Vikas Marg, New Delhi -110092
Sub: Appointment as a
First Statutory Auditor of the Company
Dear Sir`s,
With reference to the above subject, we wish to appoint your firm as the
first statutory auditors of our company i.e., M/s ___________________________in
term of provisions of section 139, 140 and 141 of the Companies Act, 2013 and
rules made there under.
You have requested that your firm audit the financial statements of the
Company as defined in Section 2(40) of the Companies Act, 2013 (‘2013 Act’),
for the financial year(s) 2015-16. The financial statements of the Company
include, where applicable, consolidated financial statements of the Company and
of all its subsidiaries, associate companies and joint ventures. You are
pleased to confirm our acceptance and our understanding of this audit
engagement by means of this letter.
Please acknowledge the receipt of this letter
FOR
ABC PRIVATE LIMITED
Name of Director
DIRECTOR/ Managing
DIN:
1.
Ratification of Appointment
of Auditors
To consider and, if
thought fit, to pass with or without modification(s) the following resolution
as an Ordinary Resolution:
Resolution:
“RESOLVED that pursuant to
the provisions of Section 139 and all other applicable provisions, if any, of
the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as
amended from time to time, the Company hereby ratifies the appointment of M/s _________________l, Chartered Accountants, having FRN No. based
at ____________based at ______________Laxmi Nagar, Vikas Marg, New Delhi
-110092, as the statutory Auditors of the Company to hold office from the
conclusion of this Annual General Meeting (AGM) till the conclusion of the
tenth AGM of the Company to be held in
the year 2017 to examine and audit the accounts of the Company at such
remuneration as may be mutually agreed between the Board of Directors of the
Company and the Auditors.”
CS DIVYANSHU SAHNI
COMPANY SECRETARY
SPICE GROUP
Mob: 9871027426
SPICE GROUP
Mob: 9871027426
Email: divyanshu.sahni@yahoo.in
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Appointment, Ratification, Reappointment of Auditor as per companies act, 2013 with standard formats
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