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CS Executive · Company Law and Practice · Accounts and Auditors

At the annual general meeting of Lotus Retail Ltd, the members consider the retiring auditor, M/s Iyer & Co. Under the Companies Act, 2013, in which situation can the retiring auditor NOT be re-appointed?

A retiring auditor cannot be re-appointed if a special resolution is passed at the meeting appointing some other auditor or expressly providing that he shall not be re-appointed. If no auditor is appointed at the AGM, the existing auditor simply continues in office.

  1. ANo auditor is appointed or re-appointed at that meeting
  2. BA special resolution is passed appointing some other auditorCorrect
  3. CThe auditor has previously served the company for one year
  4. DAn ordinary resolution is proposed to re-appoint the auditor

Explanation

A retiring auditor may be re-appointed unless he is disqualified, has given written notice of unwillingness, or a special resolution is passed appointing another auditor or expressly providing that he shall not be re-appointed. Where no auditor is appointed at an AGM, the existing auditor continues, so that option does not bar him.

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