As per sub-section (1) of Section 139 of the Companies Act, 2013 (Act), “every company shall at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting and the manner and procedure of selection of auditors by the member of the company at such meeting shall be such as may be prescribed”.
The fourth proviso to sub-section (1) of Section 139 of the Act states that “Provided also that the company shall inform the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within fifteen days of the meeting in which the auditor is appointed.”
As per sub-rule (2) of Rule 4 of Companies (Audit & Auditors) Rules, 2014, “the notice to Registrar about appointment of auditor under fourth proviso to sub-section (1) of section 139 shall be in Form ADT-1”.
Thus, an auditor shall be appointed in Annual General Meeting for a term of 5 years and such appointment shall be intimated to Registrar of Companies within 15 (fifteen) days in Form ADT-1. The requirement of filing such form has only been mentioned for fourth proviso to sub-section (1) of Section 139 i.e., for appointment in annual general meeting only.
Appointment of first auditor in board meeting:
As per sub-section (1) of Section 139 of the Act, the first auditor of a non-government company shall be appointed by the Board of Directors within thirty days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of the company, who shall within ninety days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.
Thus, the board of directors shall appoint the first auditor within 30 (thirty) days of incorporation of company and no filing or intimation in such regard shall be required for such appointment. The tenure of such auditor shall be until the conclusion of first annual general meeting wherein such auditor or some other auditor may be appointed for a term of 5 (five) years.
Details of auditor while filing Annual Accounts for the first time:
At the time of filing Form AOC-4, the help form suggests that if intimation of appointment of auditor is not required under section 139(5) / (6)/ (7) of the Companies Act, 2013 then enter the SRN ‘Z99999999’.
To make sufficient compliance, one should:
1. Appoint first auditor in board meeting by passing a board resolution who shall hold office until conclusion of first annual general meeting;
2. Appoint auditor for a term of 5 (five) years in the first annual general meeting;
3. File Form ADT-1 within 15 (fifteen) days from the date of Annual General Meeting;
4. Mention SRN Z99999999 while filing Form AOC-4 for the first time;
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