As per 139 of CA 2013 , first auditor should be appointed by BOD within 30 days from the date of registration. If board fails to do so, members should appoint within 90 days through an EGM.
Private limited company was incorporated in Jan 16 and BOD has appointed a firm as auditor within the time limit. But for some reason, company decided to remove the existing auditor and appoint new auditor. Can the company do so??If yes, plz let me know the procedure.
Also, the law is silent on from when the time limit of 90 days should start. Would you help me on the interpretation of the same as from when it should be taken into consideration.
12 December 2016
Yes the company can remove the first auditor and appoint new auditor. The procedure would be same as appointment of audit as prescribed in S.139 of CA. The time limit of 90 days would start from the date of formation of company.
27 December 2016
Thank you Amrita for your valuable opinion.
Would you rectify me if I'm wrong in my understanding on auditor appointment in the below context.
Mr. X , CA has been appointed as first auditor of a company at its EGM (board failed to appoint within 30 days) and auditor has tendered his acceptance as well. Subsequent to this, Mr. X has joined as a partner in a new firm of CA's and he don't wish to practice in his name as an individual. Hence, he submits his resignation as auditor and request the company to appoint his firm. Accordingly, company convenes an EGM (casual vacancy on account of resignation) and appoints the firm as an auditor of the company.
If my understanding is not correct or there a simpler way(without conducting EGM) of appointing firm as auditor, kindly let me know.
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