Appointment of an Auditor in Private Limited Company

Appointment of an Auditor in Private Limited Company

How can I Appoint the first Auditor for Private Company?

The appointment of First Auditor of the Company must be completed by the Board of Directors within 30 days of incorporation. In case the Board of Directors fail to appoint an Auditor, the members of the company must be informed. The members will then be required to appoint an Auditor within 90 days in the Extra Ordinary General Meeting. An Auditor so appointed will hold office until the conclusion of 1st Annual General Meeting.

         

FAQ

1.     What are relevant provisions relating to appointment of first auditor of company?

 

Which Section will apply for appointment of First Auditor?

Section 139(1)

Who will Appoint First Auditor?

Board of Directory By Passing Board Resolution in Board Meeting.

Time Limit for Appointment of First Auditor?

Within 30 days from Incorporation of Company.

Who will Appoint Fist Auditor if Board of Director Fails to Appoint First Auditor?

Members of Company by Passing of Ordinary Resolution in Extra Ordinary General Meeting.

What is the Tenure of Office of First Auditor?

First Auditor may hold office until conclusion of First Annual General Meeting.

Whether First Auditor can be remove before First Annual General Meeting, If appointed in Board   Meeting.

Yes, By Board of Directors.

Whether First Auditor can be remove before First Annual General Meeting, If appointed in General Meeting.

Yes, by Members of Company by Passing of Special Resolution, After obtaining the previous approval of Central Government in that behalf.

Whether First Auditor can be Appoint Through AOA & MOA.

No, the Appointment of First Auditor by the Articles of Company will not be valid.

 

 2.  What is Form ADT-1?

Form ADT-1 is used by a company to intimate the registrar of companies about the appointment of an auditor after the completion of its annual general meeting (AGM).
 
Sec 139 (1) of the new Companies Act 2013 mandates this and this form has to be filed every year after the AGM in which the auditor was appointed.

3.     What are the documents to be filed along with Form ADT-1?

The list of documents to be attached along with Form ADT-1 are:

1. 
Company’s Board resolution copy

2.  A written consent from the Auditor
  

3. A certificate from the Auditor that he/she not disqualified to be appointed as an Auditor.

4. What is rotation of auditor?

Every company is required at its first annual general meeting (AGM) to appoint an individual or a firm as an auditor. The auditor shall hold office from the conclusion of that meeting till the conclusion of its 6th AGM and thereafter till the conclusion of every 6th meeting. 

The appointment of auditor is to be ratified at every AGM.

5.     What is casual vacancy of auditor?

Any casual vacancy of the auditor must be filled by the Board of Directors within 30 days. If the casual vacancy is an account of a resignation of an auditor, then the appointment of the auditor must be approved at an Extra-Ordinary General Meeting convened within 3 months of the recommendation of the Board.

For more information on this visit www.taxaj.com 

 

 



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