Statutory Auditor Appointment_Tenure Less than 5 years

[harish choursiya]

Respected Members,

While referring provision for Appointment of statutory Auditor, it is stated the one term of 5 years....

Is it mandatory to appoint for 5 years at one shot?

Kindly share your views.

  

[karan vij]

NO YOU CAN APPOINT FOR A PERIOD LESS THAN 05 YEARS 

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Thanks & Regards

Karan Vij

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[CS Subrat Sahoo]

Agreed..!!!

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[Rajesh]

My Interpretation is that the Statutory Auditor shall be appointed for a period of 5 years and not less than that.

Other views solicited.

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[harish choursiya]

Thanks for sharing your understanding.

can you please share any material which can substantiate this understanding 

On Fri, Jun 30, 2023 at 10:24 AM CS Subrat Sahoo <cs.subr...@gmail.com> wrote:

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[Rajesh]

The word used in Section 139 is SHALL, so it is mandatory.  My take.

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[Vineet Maheshwari]

It should be for 5 years only. 

If there is an option for any no. of years, then no company would go for min. 5 years. 

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[Khusbu Agarwal]

Appointment would be 5 years only not less than as views solicited by other professionals.

Regards

Khusbu Agrawal

PCS and Registered Valuer

M-7003255822

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[swathi reddy]

It should be 5 years..becz we received notice from roc for appointing for one year.

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[CS Aman Kesarwani]

The extract of Section 139 

"_______________ every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting ____________________"

I have highlighted the words that need to be considered while determining the period of appointment

1. Shall: It means mandatory, not recommendary. 

2. first annual general meeting: Appointment to be made in the First AGM 

3. till the conclusion of its sixth AGM: Appointment to be made till the sixth AGM

4.every sixth meeting: Subsequent appointments will be again for 5 years. 

The provisions clearly states every appointment shall be made till the expiry of sixth AGM.   

Regards,

CS Aman Kesarwani

Aman Kesarwani & Associates

Mobile: 7532923631; 

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[harish choursiya]

Thanks to all the respected members 

and my humble appreciation to Mr. Aman Sir for highlighting with bold remarks to ease with the provisions.

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[Juhi Singh]

Yes, an auditor shall be appointed for a period of 5 years and not less than that

It is clearly stated in section 139 that shall hold office from the conclusion of the agm till the conclusion of its sixth annual general meeting and thereafter till the conclusion of Every sixth meeting.

Regards,

Juhi Singh | Manager - Secretarial  | M.+91-8013532731

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[Rajesh]

Swathiji, did the ROC impose any penalty for appointing the Statutory Auditor for one year ???

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[swathi reddy]

Actually, we received notice for another issue in which one of the point they raised is auditor appointment and asked to explain how company appointed auditors for one year and further roc  levied penalty as well but i don't remember the exact bifurcation of that penalty.

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[Rajesh]

Ok.  Thank You Swathiji.  

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