Relatives of Auditors May hold Security Up to Rs 1 Lakhs.


As per the proviso to  Section 141(3)(d) : ,
relatives of Auditors may hold Security of the Company of face value not exceeding Rs. 1 Lakhs. then auditors may taken a corrective action within 60 days , if he want to get appointment in the company.
My Doubt :
If his relatives hold security in the subsidiary, associates company. holding company, or subsidiary of such holding company.

तो क्या auditors तब भी corrective action ले सकता है या फिर सिर्फ  जिस company में appointment हो रही है सिर्फ उसी कंपनी में Holding होगी तो corrective action  ले सकते है otherwise auditors disqualified  माना जायेगा  agar  subsidiary, associates company. holding company, or subsidiary of such holding company  में relatives ki holding hui toh ???

7 answers

Ravi Staff September 13, 2017

In exemptions to relatives there is small controversy: – if you read language carefully then as per literal interpretation you will notice that relatives can hold securities only in “that company” and not subsidiaries, associate.
But as per reasonable interpretation if holding is allowed in that company where audit is being conducted other companies such as subsidiaries and associate should be covered.
I will suggest give both the point of views in exams.


But sir in videos you have said that ICAI Act has covered the holding company in such case of disqualification.

Ravi Staff September 13, 2017

that was for different disqualification.
disqualification where ca is officer or employee of company, not for holding shares


Pg 2.7 italics Ni PDA ta

Ravi Staff September 14, 2017

answer given by me is same as written on page 2.7 , i didnt understand your query shubham ?

Ravi Staff September 14, 2017

hello true patriotism, i hope your doubt is clear, that as per reasonable interpretation auditor can hold shares of other companies also and correction point will be applicable to other companies also


yes Sir, Thanks For your support.


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