Circular : No. 35/6/68‑CL‑III, dated 18‑11‑1969. Subject:-Appointment of auditors other than retiring auditors ‑ Non‑forwarding of notice to retiring auditors ‑ Consequence of The effect of non‑forwarding of notice under section 225(2) to the retiring auditors has been examined by the Company Law Bo

Failure to Notify Retiring Auditors u/s 225(2) Invalidates Resolutions; New Auditors Risk Misconduct Charges.

The Company Law Board, in consultation with the Ministry of Law, has determined that failing to forward a notice under section 225(2) to retiring auditors renders resolutions for appointing or removing auditors illegal. Section 225 mandates that retiring auditors receive notice of resolutions regarding their appointment or removal, allowing them to make written representations. Non-compliance with this section incurs penalties under section 629A. Additionally, new auditors accepting appointments without communicating with retiring auditors may be guilty of professional misconduct under the Chartered Accountants Act, 1949. These interpretations override any previous views on the matter.