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    Term of Auditor

    Posted By : Sachin / Published on : 07-Dec-2022 06:07 AM / View : 523 / Comment : 3

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    Dear All,

    Kindly explain if the auditor of the company has resigned and if we have also appointed a new auditor in EGM and also has filed ADT-1, then

    1. in next AGM, do we require to file ADT-1 again after ratification??
    2. From where the tenure of 5 years shall start: from the year of EGM or from the year of AGM??
    Read more on : auditor term

    • As per the Companies Act, 2013, the term of an auditor is as follows:

      1. Appointment: An auditor is appointed by the shareholders of a company at the annual general meeting (AGM) of the company for a term of five consecutive years.

      2. Re-appointment: An auditor can be re-appointed for a further term of five consecutive years at the end of the first term by passing a resolution at the AGM, subject to certain conditions.

      3. Rotation: After two consecutive terms of five years each, the auditor must be rotated and a new auditor must be appointed for a term of five years. This rotation requirement applies to all companies, except one-person companies and small companies.

      4. Removal: An auditor can be removed before the expiry of his/her term by passing a special resolution at a general meeting of the company, subject to certain conditions.

      5. Resignation: An auditor can resign from his/her post by giving notice in writing to the company and the Registrar of Companies (ROC).

      6. Casual vacancy: If an auditor vacates his/her office before the expiry of his/her term, the company must appoint a new auditor to fill the vacancy within 30 days. The new auditor will hold office until the conclusion of the next AGM.

      It is important to note that the above-mentioned provisions are subject to any rules or regulations that may be prescribed by the government or any other regulatory authority from time to time.

      29-03-2023 / 06:24:15 AM
      Reply
      1. Yes, as per Section 139 of the Companies Act, 2013, the appointment of an auditor shall be ratified by members at every AGM, and Form ADT-1 shall be filed with the Registrar of Companies within 15 days of the AGM. Therefore, even if the new auditor has been appointed, Form ADT-1 needs to be filed again at the next AGM for ratification.

      2. As per Section 139 of the Companies Act, 2013, the tenure of the auditor shall be for a period of 5 consecutive years. The counting of 5 years starts from the conclusion of the AGM at which the auditor was appointed. Therefore, the tenure of the newly appointed auditor shall start from the conclusion of the AGM at which the auditor was appointed, and it shall continue for 5 consecutive years.

      10-04-2023 / 11:53:19 AM
      Reply
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      30-01-2024 / 11:24:03 AM
      Reply
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