Procedure For Removal Of An Auditor Before The Expiry Of The Term
1. Convene a Board Meeting and decide about removal of the existing auditor of the company with reasons thereof. After deliberation, pass a resolution authorising the officers to make application to the Regional Director for obtaining approval of the Central Government. [Section 224(7) of the Act].
2. e-Form 24A is required to be filed with the Regional Director. Hence, make an application on the letter head of the company to the Regional Director of the Concerned Region in which the Registered Office of the company is situate, explaining in detail the grounds for removal of the existing auditor of the company and the particulars of the company’s auditor and enclose following documents –
— Copy of ordinary resolution
— Copy of special notice under section 224(7)
— Copy of the representation if any made by the statutory auditor
3. Simultaneously, deliver a copy of the application with all enclosures to the concerned Registrar of Companies for information and comments/recommendation, as may be required.
4. Follow up, explain, submit further details/particulars/documents and obtain approval from the Regional Director.
5. On receipt of the approval, convene a Board meeting of the company.
Place the approval of the Regional Director so received and decide about (i) new auditor to be appointed in place of the existing auditor of the company; (ii) obtain certificate in writing from the new auditor to the effect of his eligibility to act as auditor if appointed; (iii) fix date, day, time and place of general meeting; and (iv) approve draft notice of the general meeting, specifying therein the resolutions (ordinary or special, as the case may be for removing and appointing Auditor).
6. Issue notice to the members of the company, at least clear 21 days before the date of the meeting alongwith relevant explanatory statement and place the documents including Letter of Approval of the Regional Director for inspection of the Registered Office of the company.
7. Send three copies of the notice to the stock exchanges where the company is listed.
8. Hold the general meeting and pass the resolutions as set out in the notice with or without modification.
9. Intimate the new auditor with a certified copy of the resolution passed within seven days.
10. Also intimate the auditor removed with a certified copy or the resolution passed along with a copy of the approval of the Regional Director.
11. File e-form 23 with certified copy of the special resolution and explanatory statement relating thereto with requisite filing fees within thirty days from the date of passing of special resolutions together with a copy of the approval with the concerned Registrar of Companies.
12. Send a certified copy of the proceedings of the general meeting and information about change in auditor of the company to the stock exchanges where the company is listed.