Auditor at a General Meeting: Section 146
An auditor at a general meeting of an Indian company holds three things under section 146 of the Companies Act, 2013: a right to receive every notice of the meeting, a duty to attend it unless the company exempts him, and a right to be heard on the business that concerns him as auditor. The section runs to a single sentence, and each of those three is a separate limb of it. This page takes them in order. It is not investment advice.
Definition
Section 146
of the Companies Act, 2013 requires all notices of, and other communications relating to, any general meeting to be forwarded to the company's auditor, requires the auditor to attend unless exempted by the company, and gives him a right to be heard on any part of the business which concerns him as the auditor. Source: Companies Act, 2013, section 146.
What an auditor at a general meeting is entitled to receive
The section opens with the notice limb, and it is drafted broadly. All notices of, and other communications relating to, any general meeting shall be forwarded to the auditor of the company.
Read the three widenings in that clause. It is all notices, not the first one. It extends to other communications relating to the meeting, which reaches beyond the notice document itself. And it applies to any general meeting, so an extraordinary general meeting is inside it exactly as an annual general meeting is.
Nothing in this limb is conditional. The exemption that appears later in the section attaches to attendance, not to the notices.
The attendance duty, and who can discharge it
The second limb is the duty: the auditor shall, unless otherwise exempted by the company, attend either by himself or through his authorised representative.
| Element | What section 146 provides |
|---|---|
| The duty | Attend the general meeting |
| The escape | Unless otherwise exempted by the company |
| Who may attend instead | An authorised representative of the auditor |
| The gate on the representative | That representative shall also be qualified to be an auditor |
The last row is the one worth holding. A representative sent in the auditor's place is not simply anyone the firm nominates. The section requires that the representative shall also be qualified to be an auditor, which routes back to the eligibility test in section 141 that the same chapter sets for appointment. A person who could not be appointed as auditor cannot stand in for one at the meeting.
Any general meeting
The meetings section 146 reaches, covering both annual and extraordinary general meetings rather than only meetings at which financial statements are laid
Source: Companies Act, 2013, section 146
What may the auditor speak about once he is there?
The third limb is the right, and it is scoped rather than general. The auditor shall have right to be heard at such meeting on any part of the business which concerns him as the auditor.
That qualification does real work. The right attaches to the business that concerns the auditor in that capacity: the accounts, the audit report, his own appointment, removal or remuneration. It is not a right to address the members on an unrelated item such as a scheme of arrangement or a change of objects.
Read section 146 against the two nearby provisions and the shape is clearer:
- Section 145 requires the adverse qualifications and comments in the auditor's report to be read before the company in general meeting. That is a duty on the company to put the content in front of the members.
- Section 146 is the mechanism that puts the auditor himself in the room, able to be heard on it.
- Auditor removal under section 140 carries the auditor's separate representation right when his tenure is the business being decided.
Why the attendance rule matters to an outside reader
For anyone reading a company from its filings, section 146 is one of the reasons a general meeting is worth attention rather than a formality. Where the audit report carries an adverse qualification, the section puts the auditor in a room with the members while that qualification is read out, and gives him the floor on it.
What reaches the public record afterwards is not the exchange in the room. It is the minutes of the meeting and, for a listed company, the voting results filing and the annual report. An auditor who did not attend, or who attended through a representative, is a fact the minutes can carry.
Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.
Frequently asked questions
Does the auditor get the notice of a general meeting?
Yes, and all of them. Section 146 requires all notices of, and other communications relating to, any general meeting to be forwarded to the auditor of the company. The right is not limited to the annual general meeting or to meetings where accounts are laid. Source: Companies Act, 2013, section 146.
Must the auditor attend the general meeting in person?
Not necessarily. Section 146 requires the auditor to attend either by himself or through his authorised representative, and that representative shall also be qualified to be an auditor. Attendance is the duty; the auditor chooses which of the two routes satisfies it. Source: Companies Act, 2013, section 146.
Can a company excuse its auditor from attending?
Yes. The attendance duty in section 146 is qualified by the words unless otherwise exempted by the company, which the section embeds between shall and attend. An exemption by the company removes the duty to attend. It does not remove the duty to forward the notices, which the section states without any exemption. Source: Companies Act, 2013, section 146.
What can the auditor speak about at the meeting?
Section 146 gives the auditor a right to be heard at the meeting on any part of the business which concerns him as the auditor. It is a scoped right, tied to the auditor's own subject matter, rather than a general right to address the members on any item of business. Source: Companies Act, 2013, section 146.
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