When people think about a company’s general meeting, they usually imagine shareholders and directors sitting together to discuss company matters. But there is another important person who must also be kept in the loop — the company’s auditor.
Under the Companies Act, 2013, Section 146 explains how auditors are connected to company meetings. In simple terms, the law ensures that auditors are informed about meetings, can attend them, and are allowed to speak if matters related to their work come up.
Let’s understand what this rule actually means in practical terms.
Key Takeaways
- Companies must send every general meeting notice to the company’s auditor.
- The auditor is generally expected to attend the general meeting unless the company excuses them.
- The auditor may attend the meeting personally or send a qualified representative.
- The auditor has the right to speak during the meeting if matters related to the audit or financial statements are discussed.
- If a company fails to inform the auditor about a general meeting, both the company and responsible officers may face financial penalties.
Why the Auditor Must Be Informed About General Meetings
Imagine a company is holding its Annual General Meeting (AGM). Shareholders may discuss things like:
- approval of financial statements
- auditor reports
- questions about company accounts
Since the auditor prepares and verifies the financial statements, it makes sense that they should know about the meeting.
So the law requires the company to send every notice of a general meeting to the auditor, just like it sends notices to shareholders and directors.
This simply means, whenever the company informs shareholders about a general meeting, the auditor must receive the same communication.
This allows the auditor to:
- stay informed about discussions related to financial statements
- attend the meeting if required
- clarify issues about the audit report
Does the Auditor Have to Attend the General Meeting?
Yes — in most situations, the auditor is expected to attend the meeting.
However, there is an important practical flexibility here.
The auditor does not always need to attend personally.
If attending personally is difficult, the auditor can send an authorized representative to attend on their behalf.
There is one important condition though.
The person representing the auditor must also be qualified to become an auditor, meaning they should meet the professional eligibility required under company law.
So in simple terms:
- The auditor should attend the meeting.
- But attendance can happen either personally or through a qualified representative.
This makes the process practical for large audit firms that handle multiple companies.
What Rights Does the Auditor Have in the Meeting?
The auditor is not just a silent observer in the meeting.
The law clearly gives the auditor the right to speak if the discussion relates to their work.
Let’s say the meeting agenda includes:
- discussion of the audit report
- questions about the financial statements
- concerns about accounting practices
In these situations, the auditor has the legal right to explain their findings or clarify doubts.
This helps shareholders get accurate information directly from the person who examined the company’s financial records.
From practical experience, many companies use this opportunity to resolve shareholder questions quickly.
Example
Let’s take a simple situation.
ABC Networks Private Limited schedules a general meeting on 21 March 2025.
The company sends meeting notices to:
- Shareholders
- directors
But it forgets to send the notice to the company’s auditor.
At first glance, this may seem like a small administrative mistake.
But legally, this becomes a violation of Section 146 of the Companies Act, 2013, because the company must forward the meeting notice to the auditor.
Because of this mistake, the company can face penalties under Section 147.
Many beginners in company law find this surprising — but procedural rules like notice service are taken seriously under corporate law.
Penalties for Not Following Section 146 (Section 147)
If a company fails to follow the requirement of informing the auditor about a general meeting, penalties can apply.
Instead of remembering the legal wording, it helps to understand it in simple financial terms.
If the rule is broken:
- The company itself may have to pay a fine between ₹25,000 and ₹5,00,000.
- Any officer responsible for the mistake (such as a director or company secretary who failed to send the notice) may have to pay a fine between ₹10,000 and ₹1,00,000.
Here is a simplified view:
| Who Is Liable | Minimum Penalty | Maximum Penalty |
|---|---|---|
| Company | ₹25,000 | ₹5,00,000 |
| Officer responsible for the mistake | ₹10,000 | ₹1,00,000 |
In practice, companies avoid such situations by maintaining proper compliance checklists for meetings.
Is the auditor required to attend every general meeting?
Yes, unless the company specifically excuses them from attending.
However, attendance can happen through a qualified representative.
Does the auditor have to attend personally?
No.
The auditor may attend personally or send a representative who is qualified to become an auditor.
This flexibility helps audit firms manage multiple company engagements.
Why This Rule Matters for Companies
At first glance, this rule might look like a small compliance step.
But in reality, it supports transparency in company operations.
When auditors are informed and present in meetings:
- shareholders can ask questions about financial reports
- misunderstandings about accounts can be clarified
- trust in company reporting improves
From practical experience, many shareholder queries during meetings relate directly to the audit report. Having the auditor available helps resolve them quickly.
Conclusion
Section 146 of the Companies Act, 2013 ensures that auditors remain connected to important company discussions.
In simple terms, the law requires companies to:
- send all general meeting notices to the auditor
- ensure the auditor attends the meeting (personally or through a qualified representative)
- allow the auditor to speak on matters related to their audit work
If companies ignore this requirement, penalties under Section 147 may apply.
