Appointment of Statutory Auditor in case of Companies other than Government Companies


0

Appointment of Statutory Auditor in case of  Companies other than Government Companies

First Auditor Appointment {section 139(6)}

Who and When?? : The first auditor shall be appointed by the Board of Directors within 30 days from the date of registration of the company.

What if Board Fails to appoint the First Auditor?? :  If Board fails to appoint the first auditor, it shall inform the members of the company, who shall within 90 days at an EGM (extraordinary general meeting) appoint such auditor (i.e. within 90 days from the date of received of the information by the member for appointment of the auditor).

Tenure of First Auditor: The first Auditor shall hold office till the conclusion of the first AGM (annual general meeting) of the company.

Consent from the Auditor: Written consent of the auditor to such appointment and a certificate shall be obtained from the auditor.

ResolutionAppointment of First auditor by passing of Board Resolution whether in the Meeting of Board of Directors or by Circular Resolution.

ROC Form: There is no need to file ADT-1 for appointment of the First auditor

Subsequent Auditor Appointment {Section 139(1)}

Who and When?? : Every company shall, at the first AGM (Annual General Meeting), appoint an individual or firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth AGM (Annual General Meeting).

Tenure of the Subsequent Auditor: Subsequent auditor shall hold office from the conclusion this annual general meeting till the conclusion of the its sixth Annual General Meeting.

Consent from the Auditor: Written consent of the auditor to such appointment and a certificate shall be obtained from the auditor.

ResolutionAppointment of auditor in Annual General Meeting and the fixing of the remuneration of the auditors shall be an ordinary business to be transacted at an annual general meeting of a Company. Company will pass ordinary resolution for the same.

ROC FormCompany shall inform the ROC by filling Form ADT-1 within 15 days of the meeting in which the auditor is appointed.

Casual Vacancy Appointment {Section 139(8)}

Who and When?? Casual Vacancy be filled by the Board of Directors within 30 days of such casual vacancy.

But if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board.

Tenure:  Such Auditor shall hold the office till the conclusion of the next AGM (annual general meeting)

Consent from the Auditor: Written consent of the auditor to such appointment and a certificate shall be obtained from the auditor.

ResolutionAppointment of auditor due to casual vacancy by Shareholders in the extra ordinary general meeting by passing of ordinary resolution.

ROC FormCompany shall inform the ROC by filling Form ADT-1 within 15 days of the meeting in which the auditor is appointed.

Point to be Noted
  1. Explanation.—For the purposes of this Chapter, “appointment” includes reappointment.
  2. Where a company is required to constitute an Audit Committee under section 177, all appointments, including the filling of a casual vacancy of an auditor under this section shall be made after taking into account the recommendations of such committee.
  3. Where at any annual general meeting, no auditor is appointed or re-appointed, the existing auditor shall continue to be the auditor of the company.
  4. Subject to the provisions of section 139(1) and the rules made thereunder, a retiring auditor may be re-appointed at an annual general meeting, if—

(a) he is not disqualified for re-appointment;
(b) he has not given the company a notice in writing of his unwillingness to be re-appointed; and
(c) a special resolution has not been passed at that meeting appointing some other auditor or providing expressly that he shall not be re-appointed.

Related Article: Appointment of Statutory Auditor in case of Government Companies


Like it? Share with your friends!

0

0 Comments

Your email address will not be published. Required fields are marked *