Like to know the steps required for a amicable and systematic change in the Statutory Auditors … in your Private Limited Company ?
[Academic discussion only]
These are the Steps recommended for Change of Auditors in a Company
Change of Statutory Auditors Steps
Theory part : Resignation of Auditor
Under the Companies Act 2013, the resignation of an auditor of a company must be done in compliance with the provisions mentioned in Section 140 of the Act. According to this section, an auditor who wishes to resign must first inform the company’s board of directors and provide them with a written notice. The notice must contain the reason(s) for the resignation and the date on which the resignation will take effect. The auditor must also file a copy of the resignation letter in e form ADT-3 with the Registrar of Companies (RoC) within 30 days of resigning.
Let us know the steps required in case of a mid term resignation
Resignation of the Existing Statutory Auditor ..
Letter to the Board of Directors giving brief reason and effective date.
Board Meeting of the Company
a) Notice of Board Meeting
b) Attendance of the Board meeting
c) Shorter Notice of Board meeting.. its acceptance by all directors
d) Minutes of the Board Meeting
e) Extract of the Minutes of the Board meeting
Extra Ordinary General Body Meeting of the Company
a) Notice of EGM
b) Attendance of the EGM
c) Shorter Notice of EGM (if required).. its acceptance by all shareholders
d) Minutes of the EGM
e) Extract of the Minutes of the EGM
Communications of/with New Auditors
a) Invitation to New Auditors by the Board with request to give their consent letter and eiligibility
b) Letter of consent , cum letter of eligibility from the new auditors
c) Letter from Incoming Auditor to Old Auditor asking for “if there is any professional objection to acceptance from their side”
d) NOC and No dues certificate from old Auditors
e) Issue of Letter of Appointment ( by the Company to the “New” Auditors )
ROC Online Filings regarding auditors
a) ADT-3 : Notice of Resignation by the Auditor
b) ADT-1 : Appointment of New Auditor – intimate ROC
c) MGT-14 : Intimation of the EGM resolutions to the ROC
It is important to note that the provisions related to the appointment of an auditor in a casual vacancy may vary depending on the specific circumstances and the type of company.
Example : Government Companies…There is a different Method. Listed companies, section 8 companies, Change due to Rotation, Change due to Untimely death, etc.. there could be different situations.
Therefore, it is always advisable to seek professional advice and refer to the relevant provisions of the Companies Act 2013 before proceeding with the appointment process.
Source 1 : https://www.mca.gov.in/MinistryV2/companyformsdownload.html
Source 2 : https://www.seedup.in/pages/change-auditor-process
Source 3 : https://www.professionalutilities.com/compliance-for-change-auditors-in-company.php
So, this was the academic discussion and suggested SOP’s for a Small / Medium Pvt Ltd company, especially in the home grown MSME sector. There the focus has been on the Change of Auditors in a Private Limited Company by mutual consent. And proper documentation in time.
#Change of Auditors in a Private Limited Company by mutual consent #How to request and happily manage the change in Auditors in a Pvt Ltd company. Focus MSME Private Limited company
