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Appointment of First Auditor as per companies Act 2013

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Appointment of FIRST AUDITOR in case of every company except govt. company or company owned/ controlled by CG/SG/CG and SG [139(6)]:-

The First auditor of a company, other than a Government Company, shall be appointed by the BOARD OF DIRECTORS WITHIN THIRTY DAYS OF THE DATE OF INCORPORATION of a company. The auditor so appointed, shall hold office until the conclusion of the first annual general meeting.IF THE BOARD FAILS to appoint the first auditor, it shall inform the MEMBER of company, who shall within 90 days at an Extra Ordinary General Meeting shall appoint auditor.

If the Board fails to appoint the First Auditor, an Extra Ordinary General meeting will be called by the Board to appoint the first auditor within 90 days of incorporation.

In case of appointment of First auditor by Board of Director of company pursuant to section 139(6), company is under no obligation to give notice to appointment of First Auditor to the Registrar.

For the company incorporated after 01stApril, 2014 first Auditor shall hold office until the conclusion of the first annual general meeting of company.

A. APPOINTMENT OF AUDITOR AT FIRST ANNUAL GENERAL MEETING (AGM):

Every company shall at First Annual General meeting (AGM) appoint an individual or firm as an Auditor to hold office from the conclusion of that meeting till the conclusion of the sixth (6th ) Annual General Meeting (AGM).

The duration of auditor of company will be term of consecutive Five (5) years each for Individual and Two terms of Consecutive Five (5) years in case of Auditor Firm.

BUT the provision of 5 Year and 10 year will not applicable on One Person Company and Small Companies as per Rule-5 The Companies (Audit and Auditor) Rules, 2014.

B. CONSENT AND CERTIFICATE FROM AUDITOR:- [Second Provison of Section-139 (1)]:

Documents Require from Auditor before Appointment in AGM

→ WRITTEN CONSENT of auditor for such appointment.

→ CERTIFICATE from auditor for such appointment.

→ Under Rule 4 of Chapter-X, Auditor shall state in said certificate that he satisfy the condition given below: (Third Provison of Section- 139(1);
The individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Chartered Accountants Act, 1949 and the rules or regulations made there under;
The proposed appointment is as per the term provided under the Act;
The proposed appointment is within the limits laid down by or under the authority of the Act;
The list of proceedings against the auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.


Appointment of first auditor in case of govt. company or company owned/ controlled by CG/SG/CG and SG139 (7):-
                    
         Appointment of first auditor shall be made by CAG within 60 days of registration of the company. If CAG fails to appoint the first auditor within given time then Board of such company shall appoint first auditor within 30 days. If Board fails to appoint the first auditor within given time then it shall inform to members and members shall make the appointment of first auditor within 60 days of information at an AGM. The First Auditor shall hold office till the conclusion of first AGM.

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