# Eligibility, Qualifications & Disqualifications — Section 141
## Who is qualified to be appointed as Auditor — Section 141(1)
- Individual: Must be a Chartered Accountant (holding certificate of practice).
- Firm (including LLP): Where majority of partners practicing in India are Chartered Accountants, the firm may be appointed in its firm name. Only the CA partners shall be authorised to act and sign on behalf of the firm.
## Disqualifications — Section 141(3)
The following persons shall NOT be eligible for appointment as auditor of a company:
### (a) Body Corporate
A body corporate other than an LLP.
### (b) Officer or Employee
An officer or employee of the company.
### (c) Partner / Employee of Officer or Employee
A person who is a partner, or who is in the employment, of an officer or employee of the company.
### (d) Holding Security or Interest
A person who, or his relative or partner:
| Person | Restriction |
|---|---|
| Self or Partner | Holds any security or interest in the company, or its subsidiary, or its holding, or associate company, or subsidiary of holding company |
| Relative | May hold security of face value not exceeding ₹1 lakh |
Exception for Relatives: Security of face value ≤ ₹1,00,000. If the limit is exceeded, the auditor must take corrective action within 60 days.
### (d)(ii) Indebtedness
- A person whose relative is indebted to the company / its subsidiary / holding / associate / subsidiary of holding company in excess of ₹5,00,000.
### (d)(iii) Guarantee/Security
- A person who or whose relative has given guarantee or provided security in connection with the indebtedness of any third person to the company / its subsidiary / holding / associate in excess of ₹1,00,000.
### (e) Business Relationship
A person or firm who, whether directly or indirectly, has a business relationship with the company / its subsidiary / holding / associate, of such nature as may be prescribed.
Exception:
- Transactions in the ordinary course of business at arm's length price.
- Professional services rendered by the auditor.
### (f) Relative as Director / KMP
A person whose relative is a Director or is in employment of the company as a Director or KMP.
### (g) Holding Appointment in More than 20 Companies
A person who is in full-time employment elsewhere, OR a person who, or partner of a firm holding appointment as auditor, holds appointment as auditor of more than 20 companies (other than OPC, dormant company, small company and private company having paid-up share capital less than ₹100 crore).
### (h) Convicted of Fraud
A person who has been convicted by a court of an offence involving fraud and a period of 10 years has not elapsed from the date of such conviction.
### (i) Consulting & Specialized Services
A person who, directly or indirectly, renders any service referred to in Section 144 to the company or its holding / subsidiary company.
## Disqualification Incurred After Appointment — Section 141(4)
Where a person appointed as auditor of a company incurs any of the disqualifications mentioned in Section 141(3) after his appointment, he shall be deemed to have vacated his office and such vacation shall be deemed to be a casual vacancy in the office of the auditor.