AUDITOR APPOINTMENT- ROC (PVT/PUBLIC/SEC8) SEC 139

Introduction

An auditor is a person who checks and evaluates the validity and reliability of a Company or firm’s financial documents and statements. He is responsible for providing the audit of the organisation. The auditor creates a report which he gives the organisation mentioning about the scope of the firm along with the pros and cons. The report is responsible for determining the accuracy level and for the clarity of the organisation.

 

 It is a must for every Company to appoint an auditor within 30 days of registration. 

 

Documents Required

The following are the documents required for the auditor appointment:

Resignation letter from the previous auditor

SRN of the ADT-3

The digital signature of Director

Details of the auditor who has been appointed which include PAN, membership no, Address, Email id, etc. 

 

Benefits of Section 8 ComPANies

The following are the benefits under section 8 comPANies:

There is no requirement of minimum paid share capital 

There is no need for the appointment of a Company secretary 

No requirement of independent directors

There is no requirement for the constitution of nomination and Remuneration Committee

There is a Stakeholder Relationship Committee

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FAQ - Frequently asked questions

What is the time limit for filing ADT-1 upon the resignation of the previous auditor?

ADT-1 form needs to be filed within 15 days of the appointment of a new auditor


Can I file the Form ADT-1 after passing deadline of 15 Days?

Yes, it can be filed by paying any applicable additional fee.


What is the time limit for appointment of the first auditor of a company

The first auditor of a company shall be appointed by the Board within 30 days from the date of registration of the company.


Can a Section 8 company be converted into another type of company?

Yes. However, it can be only done as per the rules specified by the Ministry of Corporate Affairs.


Can Section 8 Companies claim full tax exemption?

Yes. By fulfilling the conditions specified by the relevant provisions under the Income Tax Act, Section 8 Companies can claim full exemption.


Can section 8 Companies issue dividends to its members?

A Section 8 Company can be incorporated as a company limited by shares or guarantee, with or without share capital. Irrespective of the category of the company, a Section 8 company cannot issue dividends to its members.


What is the penalty for failure to appoint an Auditor within the prescribed time?

Failure to appoint an Auditor is punishable with a fine of Rs. 25,000 which may extend up to Rs. 5,00,000.


What is the penalty for the non-filing of a Director’s consent form with the RoC (Registrar of Companies)?

Failure to file Director’s Consent notice is punishable with a fine up to Rupees 50,000 or imprisonment up to six months. What happens if I don’t file my Annual Returns? Failure to file Annual Returns is punishable with a fine of Rupees 50,000 which may extend to Rupees five lakh.


What is the penalty for non-compliance of requirements on the Annual General Meeting?

1. Failure to send a copy of audited financial statements to the members before the Annual General Meeting, and record the minutes of the meeting are each punishable with a fine up to rupees 25,000/- 2. Failure to conduct an Annual General Meeting is punishable with a fine up to Rupees one lakh. 3. Failure to submit a report on Annual General Meeting is punishable with a fine of Rupees one Lakh which may extend to Rupees five Lakh.


Is there any condition to claim tax exemption?

Yes, you need to register your company with the Commissioner of Income-tax to be eligible for tax exemption.


Can I claim tax exemption without registration?

No. If your company is not registered with the Commissioner, the tax will be levied on par with other types of companies, at 30%.


Can A Section 8 Company accumulate profit without paying taxes?

Yes. A Section 8 Company is allowed to accumulate or set apart (up to 15%) of its total income without paying tax.