Question

Which of the following shall NOT be eligible for appointment as an auditor of a company as per Section 141(3) of the Companies Act, 2013?

• A. Limited liability partnership registered under the Limited Liability Partnership Act, 2008
• B. A person who is holding any security of the company of face value not exceeding Rs. one thousand.
• C. A person who has been convicted by a Court of an offense involving fraud and a period of 10 years has been elapsed from the date of such conviction.
• D. All the above

Answer 1

The correct option is B A person who is holding any security of the company of face value not exceeding Rs. one thousand.

Following person/s shall not be eligible for appointment as an auditor if he, or his relative or partner —

(i) is holding any security of or interest in the company or its subsidiary, or

of its holding or associate company or a subsidiary of such holding company:

Provided that the relative may hold security or interest in the company of

face value not exceeding one thousand rupees or such sum as may be prescribed;

(ii) is indebted to the company, or its subsidiary, or its holding or associate

company or a subsidiary of such holding company, in excess of such amount as

may be prescribed; or

(iii) has given a guarantee or provided any security in connection with the

indebtedness of any third person to the company, or its subsidiary, or its holding

or associate company or a subsidiary of such holding company, for such amount

as may be prescribed