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The government has relaxed conditions for unlisted companies that do not have loans from banks, financial institutions or deposits from public of more than Rs 50 crore on rotation of auditors.
Currently, these companies can't appoint individual auditors for consecutive five years and auditor firms for two straight terms of five years if their paid up capital is at least Rs 20 crore.
The ministry of corporate affairs has come out with a notification amending this rule under the Companies Act to raise this threshold to Rs 50 crore.
"The increase in the threshold on paid-up capital for triggering rotation of auditors would provide relief to a number of private companies where there is limited public interest," said Sai Venkateshwaran of KPMG.
Mamata Binani, past president of the Institute of Company Secretary said this will help in ease of doing businesses for these firms. These companies will not have to keep rotating auditors now.
The rule was changed in line with recommendations of Parliament's standing committee on finance.