?
The section related to removal of auditor is
Answer & Solution
Correct Answer:
Option
B
Under the Companies Act, 1956, the removal of an auditor before the expiry of his term was covered under Section 224(7).
According to this section, an auditor could be removed before the completion of his tenure only with the prior approval of the Central Government and after passing a special resolution in the general meeting of the company.
This was introduced to protect the independence of auditors and prevent arbitrary removal by company management.
Under the Companies Act, 2013, the relevant provision is Section 140.
As per Section 140(1), an auditor appointed under Section 139 may be removed from his office before the expiry of his term only by passing a special resolution in a general meeting and obtaining the previous approval of the Central Government.
Therefore:
- In the 1956 Act → Removal of auditor = Section 224(7)
- In the 2013 Act → Removal of auditor = Section 140
According to this section, an auditor could be removed before the completion of his tenure only with the prior approval of the Central Government and after passing a special resolution in the general meeting of the company.
This was introduced to protect the independence of auditors and prevent arbitrary removal by company management.
Under the Companies Act, 2013, the relevant provision is Section 140.
As per Section 140(1), an auditor appointed under Section 139 may be removed from his office before the expiry of his term only by passing a special resolution in a general meeting and obtaining the previous approval of the Central Government.
Therefore:
- In the 1956 Act → Removal of auditor = Section 224(7)
- In the 2013 Act → Removal of auditor = Section 140
Join the Discussion
Login to post a comment or share your explanation.
Login