Bro the origin is from the rotation of Auditor. In the rule wrt rotation of Auditor it’s mentioned that the rotation of Auditor will apply to all partners of the firm and in case of disqualification it is mentioned that at the time of appointment and after the date of appointment and b4 expiry of his tenure if a partner is disqualified by any clause of sec 141(3) than the partners of him will also b disqualified
The rotation section deals with the appointment of a firm with common partners on which cooling period has been applied.
And the disqualification section deals with the appointment of firm whose partner or his relative is interested in the company by whatever means it may be due to security guarantee or indebtedness.
Third rotation applies to listed companies and prescribed class or classes of companies. And disqualification applies to all Companies.
=ll (If a partner is disqualified , such firm is also disqualified) ll=
is this a literal interpretation or reasonable ???
if literal then in which sec it is written?
rotation ke provisions to new co act 2013 mai hai , co act 1956 mai nahi the. But purane act 1956 mai bhi yahi interpretation tha. so rotation ke provisions ki vajah se to nahi hoga aisa.
Sec 141 mai bhi kahi aisa direct nahi likha hai.
Sec 141(3) – Following person shall not be eligible for appointment as an auditor of co –
then (a) to (i). — kisi bhi clause mai aisa nahi likha hai.
if one partner is disqualified then firm will be disqualified, this is not written explicitly in new companies act or old companies act. but it is very old well accepted convention, which appears logical also that if any partner is disqualified then firm will be disqualified as after we appoint ca firm as auditor any partner can do audit and disqualified partner may take advantage directly or indirectly hence convention followed over so many years looks absolutely fine.
further in case of rotation which firms wont be able to do audit for cooling period is explained in rules.
— firm with common partner on date of appointment
— firms where signing partner joined after resigning firm under rotation
— network firms
Explanation II to Section 140(5) — For the purposes of this Chapter the word “auditor” includes a firm of auditors