Section 140 of the Companies Act, 2013
Section 140 of the Companies Act, 2013 deals with the "Removal, Resignation of Auditor and Giving of Special Notice."
📜 Section 140 – Removal, Resignation of Auditor and Giving of Special Notice
🔹 (1) Removal of Auditor Before Expiry of Term:
The company cannot remove an auditor before the expiry of their term without:
Special resolution of the company, and
Previous approval of the Central Government.
Application to the Central Government must be made in Form ADT-2 within 30 days of the Board resolution.
🔹 (2) Resignation by Auditor:
If the auditor resigns, they must file a statement with:
The company, and
The Registrar of Companies (ROC),
In Form ADT-3, within 30 days of resignation.
For listed companies and specified classes of public companies, the resignation must also be filed with the Comptroller and Auditor-General (CAG) or National Financial Reporting Authority (NFRA) if applicable.
🔹 (3) Special Notice for Auditor Appointment:
If a company proposes to appoint someone other than the retiring auditor, or explicitly decides not to re-appoint the retiring auditor, a special notice under Section 115 is required.
🔹 (4) Penalty for Non-Compliance:
If the auditor does not comply with sub-section (2):
Penalty:
Minimum: ₹50,000
Maximum: ₹5,00,000
✅ Summary Table:
| Provision | Details |
|---|---|
| Removal of auditor | Needs CG approval + special resolution |
| Auditor resignation | File Form ADT-3 within 30 days |
| Special notice | Needed to not re-appoint or change auditor |
| Penalty | ₹50,000 to ₹5,00,000 for non-filing by auditor |
RELATED Blog
0 comments