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    Auditor how to ascertain Private Company Exemption under the ambit of 20 Companies ?

    Posted By : SARIKA / Published on : 13-Jul-2022 09:41 AM / View : 205 / Comment : 2

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    under 141 (1)(g) a person who is in full time employment elsewhere or a person or a partner of a firm holding appointment as its auditor, if such persons or partner is at the date of such appointment or reappointment holding appointment as auditor of more than twenty companies;

    Note: In case of private company - in clause (g) of sub-section 3 after the words twenty companies”, the following words shall be inserted;

    “other than one person companies, dormant companies, small companies and private companies having paid-up share capital less than one hundred crore rupee”- Notification dated 5th june, 2015

    But 5th June Notification is only applicable if Company is in compliant of Section 134 & 92 related to ROC Filing Annually , therefore whats the consequences if Auditor appointed for 5 years and given Consent under section 141 but not able to find the applicability of Exemption on that specific Private co. ? Please someone who can understand my issue related to the Auditor appointment subject to Exemption on Private Company from the ambit of 20 co limit then please clear ...
    Read more on : under ambit companies exemption company ascertain private auditor

    • Hello Ma'am,

      Greetings!!

       

      First of all, I appreciate your query that made me dive deep into the provisions of section 141 along with the notification dated 5th June 2015 read with notification dated 13th June 2017:

      According to section 141(4)  

      Where a person appointed as an auditor of a company incurs any of the disqualifications mentioned in sub-section (3) after his appointment, he shall vacate his office as such auditor and such vacation shall be deemed to be a casual vacancy in the office of the auditor.

      Conclusion

      according to this subsection if that private company makes a default in section 137 (filing financial statements along with CFS in AOC-4) or section 92 (filing annual return in form MGT-7/7A) then that company will not be entitled to claim exemption ( vide notification dated 13th June 2017)

      it leads to disqualification of auditor (for the purpose of that private company only). And as a result, he is required to vacate from his office in that private company and such vacation shall be deemed to be casual vacancy.[as per section 141(4)]

       

      In order to avoid such casual vacancy, the company shall make default good in sections 137 and 92 by filing all necessary forms along with attachments with payment of penalties.

       

      Hope it helps 

      Thank you

       

       

      15-07-2022 / 05:52:52 AM
      Reply
    • Well explained Ms. @neetu chauhan

      02-09-2022 / 11:02:53 AM
      Reply
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