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According to section 139(6) of Companies Act 2013, a Private Limited company has to appoint its first auditor within 30 days from the date of incorporation in the first board meeting. If the board of directors are not able / failed to appoint, then auditor has to be appointed within 90 days in a General Meeting.
First auditor as appointed above will hold office from date of appointment in the first board meeting to till the conclusion of the 1st Annual General Meeting.
The first auditor of the company holds office from the conclusion of the first annual general meeting until the conclusion of the sixth annual general meeting and after this until the conclusion of every sixth meeting. However, the members of the company ratify the appointment of auditors at every annual general meeting.
The Board of Directors shall fill any casual vacancy in the office of the auditor of a company other than a Government Company within thirty days. This does not include any casual vacancy arising out of the resignation of an auditor. However, in case of a casual vacancy arising out of the resignation of an auditor, the Board of Directors shall fill the vacancy within thirty days. But, the company needs to approve this appointment at a general meeting within three months of the Board’s recommendation. Such an auditor shall also hold the office till the conclusion of the next annual general meeting.
Procedure to Appoint Auditor
- Intimate the proposed auditor(s) regarding the intention of appointing him as 1st auditor and enquire whether he is eligible and not disqualified to be appointed as auditor of the company and if appointed number of companies will be within the specified limits.
- Obtain his/her consent letter
- Conduct first board meeting within 30 days of Incorporation
- Along with other items, appoint first auditor and decide his/her remuneration
- File for ADT-1 within 15 days from the appointment
- Intimate the Auditor appointed, along with extract of the board meeting resolution of his/her appointment
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Note: This Post was last updated on December 10, 2022
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