The Office of the Registrar of Companies has extended the deadline for the rotation of auditors to 31 December 2022.
According to the law on the rotation of auditors as provided by Section 139(11) of the Companies Act, 2019 (Act 992), “An auditor shall hold office for a term of not more than six years and is eligible for appointment after a cooling-off period of not less than six years”.
Based on this, the Office of the Registrar of Companies gave a timeline for the change of auditors to be completed by the end of August 2022.
Companies were advised that except for companies formed for special purposes, for example, banking and Insurance or any other businesses which are subject to special regulation such as the Securities and Exchange Act, 2016 (Act 929) and where auditor rotation was specifically provided for, all other companies were to comply with the law.
A statement from the Registrar of Companies, however, said the deadline has been extended to 31st December 2022, after which the sanctions spelt out under Section 139(10) of the Companies Act, 2019 (Act 992) that where a company contravenes a provision of that section, the company, and an officer of the company that is in default are liable each to pay to the Registrar an administrative penalty of two hundred and fifty penalty units will be applied.