Appointment of First Auditor in Private Company

Appointment of First Auditor in Private Company

Section Attracts -139(6) of the companies Act 2013

Time Limit for Appointment– within 30 days from incorporation of the Company

Accounts Audit: From the date of Incorporation till the date of end of Financial Year.

Hold Office: Till the Conclusion of First Annual General Meeting.

Way of Appointment of First Auditor

1. By Board of Directors of the Company–

• According to Section 139(6) the first auditor should be appointed by the board of directors within 30 days from the registration of the company.
• Company holds the board meeting and appoint the same.

2. By Members of the Company–

• As per section 139 (6) in the case the boards fail to appoint first auditor within 30 days from the incorporation.
• The board shall inform the members of the company regarding this failure.
• The company Conduct Extra Ordinary General Meeting by sending notice to members and appoint auditor within 90 days from the date of failure to appoint.

Key Points:

1. The consent Letter of Auditor must be before the date of Appointment.

2. Filling Form ADT-1 for appointment of first auditor is not mandatory, company can file the form only for its records and while filling the form keep in mind that the tenure of the auditor is from the date of incorporation till the date of ending of Financial Year.

3. At the time of First Annual General Meeting the Individual or Auditor firm should be appointed as auditor, by the company who shall hold office from the conclusion of that meeting till the conclusion of its sixth Annual General Meeting.

4. And at this time company should file Form ADT-1, mandatory as appointment of auditor to the respective Registrar of Companies.