The Ministry of Corporate Affairs (“MCA”) has issued the Companies (Removal of Difficulties) Third Order, 2016.
The provisions of Section 139 (1) of the Companies Act, 2013 (the “Act”), which came into force on 01 April 2014 provides that companies are required to appoint auditor at the Annual General Meeting (“AGM”) who shall hold office from the conclusion of that meeting till the conclusion of sixth AGM. Whereas, the third proviso of Section 139 (2) of the Act states that every company existing on or before the commencement of the Act and falling within the ambit of Section 139 (2) (i.e. provisions relating to rotation of auditors) of the Act, are required to comply with the requirements of the said sub-section within 3 years from the date of commencement of the Act.
Given the above, difficulties have arisen regarding compliance with the provisions of the third proviso to Section 139 (2) of the Act in so far as they relate to the period within which companies would comply with the provisions of Section 139 (2) of the Act. In this regard, the Central Government has made the order by which, the third proviso to Section 139 (2) of the Act would be substituted with the following proviso:
"Provided also that every company, existing on or before the commencement of this Act which is required to comply with the provisions of this sub-section, shall comply with requirements of this sub-section within a period which shall not be later than the date of the first annual general meeting of the company held, within the period specified under sub-section (1) of section 96, after three years from the date of commencement of this Act."
The said order shall be deemed to come into force with effect from 01 April 2014.
To read the full text of the order, please visit the below link:http://www.mca.gov.in/Ministry/pdf/ROD_Third_Order_2016.pdf
Labels: Company Law Updates