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?
|
|
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.
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