Section 140 of CA 2013 : Section 140: Removal, Resignation Of Auditor And Giving Of Special Notice

Explanation using Example

Imagine a company, XYZ Corp, has an auditor, Mr. A, appointed under Section 139 of the Companies Act, 2013. The management of XYZ Corp suspects that Mr. A has been negligent in auditing and has potentially overlooked financial discrepancies. The board of directors wishes to remove Mr. A before his term expires. According to Section 140(1), they must pass a special resolution and obtain prior approval from the Central Government. They also have to provide Mr. A with a chance to be heard before any action is taken.

Mr. A, realizing that his relationship with XYZ Corp has become untenable, decides to resign. As per Section 140(2), he must file a statement with the company...

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