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Board meeting after incorporation

jeets (CS ) (461 Points)

13 July 2010

Hello,

A private company is incorporated on 25th August 2009, Can the company hold its first board meeting on October 2009.

Section 285 states there should be meeting ever quarter, in the above circumstance Quarter-2 meeting has been missed out, however since the company is incorporated in August would be it fine to hold the first board meeting in October

Please advice.

Thanks

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16 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 13 July 2010

Hello,

As per section 224(5), the first auditor or auditors of a company shall be appointed by the Board of directors within one month of the date of registration of the company.

So keeping in view the requirement of section 224(5) you have to hold your first BM within one month of the date of registration of the company.

Please find enclosed herewith agenda cum minutes for first board meeting for your record and reference.

Thanks

Attached File : 23 sample first board meeting minutes.doc downloaded: 1547 times

jeets (CS ) (461 Points)
Replied 13 July 2010

Thankyou for the reply sir,

Does this section 224 (5) mentions only about appointment of auditors or it also applies to holding of board meetings?

Also

What if the board doesn't appoint an auditor in the first board meeting, is it mandatory then to appoint an audtior in the AGM or the board can appoint auditor in subsequent board meeting.

Please advice

Regards

Nitin Grover (CS) (1228 Points)
Replied 13 July 2010

Dear Jeet

If you have appointed Auditors during incorporation of the company then also you have to do B.M. before September.

Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 13 July 2010

Appointment of first auditors through Memorandum and Articles of Association.—The Institute of Chartered Accountants of India has expressed its opinion vide Compendium of Opinion Volume No. 1 that the appointment of first auditors through the Memorandum and Articles of Association of the newly floated private company is not a valid appointment.

So appointment of first auditor should be through a BM only. However:

A company in general meeting may appoint the first auditor or auditors if the Board of directors fails to exercise its power of appointment of first auditors within one month of the date of incorporation of the company.

jeets (CS ) (461 Points)
Replied 13 July 2010

Thanks everyone for your replies.

Please correct me if I'm wrong:-

This means the board needs to appoint the first auditors within one month of incorporation if they don't exercise the power regarding the same. The auditor would have to appointed in the AGM,

The board cannot appoint auditor in the subsequent board meetings following the first board meeting which was held within one month. It has to wait until the General meeting for appointing an auditor.

Please confirm whether I have drawn the right conclusion.

Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 13 July 2010

Your conclusion is corrct.

But kindly appreciate if the Board of directors fails to exercise its power of appointment of first auditors within one month of the date of incorporation of the company, then to appoint first auditor no need to wait till first AGM. In fact you have to appoint the first auditor by holding an EGM as early as possible to fulfill the legal requirement and to conduct the audit work.

Regards

vivek (CS) (751 Points)
Replied 13 July 2010

Upto my understanding if Board is unable to appoint the first auditor within a month even though u don't need to wait till AGM, Directors must call a EGM and appoint the Auditor if you will wait till AGM then how will you get your financial statements adopted in AGM. Will the auditor do the job without a valid appointment?

Director's need to call a EGM for said purpose asap.

BARKHA MITTAL (C.A., B.Com) (57 Points)
Replied 03 April 2012

Sir, in my case its some thing different.Company was incorporated on 4th of Feb and Auditors was appointed in EGM held on 12th of Feb. Notice for holding such EGM was given on 9th of Feb.

4 feb company incorporate

9 feb Notice for EGm

12 feb EGM for appointment of Auditors

I want to conform whether it is correct in the eyes of Law that First Auditors were appointed in first meeting which is not a Board Meeting but an Extra-Ordinary General Meeting.

Second thing I want to know whether it is compulsary to hold a Board Meeting for giving Notice for EGM.

prakash (Company Secretary) (1352 Points)
Replied 03 April 2012

EGM must have been held by taking approval of board for giving notice by conducting board meeting or circular resolution.

Appointing of auditor by Members concern is correct, but for sending EGM Notice should have been approved by Board at its meeting or by circular resolution.

Have you taken consent from the member for conducting of meeting with shorter notice. as per the companies act 21 days prior notice is required for general meeting, if AOA provides otherwise you have to follow AOA of the company. since your notice dated 9th Feb and EGM is 12Feb.

BARKHA MITTAL (C.A., B.Com) (57 Points)
Replied 03 April 2012

Thank You Mr. Prakash.

vikash (trainee) (21 Points)
Replied 17 September 2012

can anyone guide me that, how will first auditor appointed, when all director of a private company is outside india. can first auditor be appointed outside india. if yes, plz tell me the process. it urgent

Tanveer Md Masood (Indispensable) (361 Points)
Replied 19 September 2012

DEAR VIKASH,

FIRST AUDITORS ARE GENERALLY APPOINTED BY THE BOARD OF DIRECTORS WITHIN ONE MONTH OF THE DATE OF REGISTRATION/ INCORPORATION OF THE COMPANY. IF THE DIRECTORS ARE OUTSIDE THEN MEETING CAN BE CONDUCTED THROUGH VIDEO CONFERENCING AS PER THE GREEN INITIATIVE TAKEN BY THE MCA.

REGARDS..

TANVEER MD MASOOD

CALCUTTA.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 20 September 2012

If the meeting can be done outside india, it can be held there and auditors can be appointed. There is no restrictions on the Meeting of Board of Directors, it can be held anywhere and anytime.

Otherwise, they have to conduct general meeting and auditors will be appointed in that general meeting.

Tanveer Md Masood (Indispensable) (361 Points)
Replied 20 September 2012

DEAR MR.AAMKUT SRIVASTAV..

BOARD MEETING CANNOT BE BE HELD ANY WHERE ANY TIME. SEC.285 STATES THAT BM SHOULD BE HELD AT THE REGISTERED OFFICE OF THE COMPANY OR THE STATE , TOWN OR CITY WHERE THE REGISTERED OFFICE IS SITUATED. AGAIN, IF THE DIRECTORS ARE LOCATED OUTSIDE OR ABOROAD THEN NOTICE OF BM SHOULD BE SENT TO THEM. MCA HAS INTRODUCED THE CONCEPT OF MEETING THROUGH VIDEO CONFERENCING AS PART OF THE GREEN INITIATIVE TAKEN BY THEM. THEREFOERE, IF THE DIRECTORS ARE LOCATED ABROAD, STILL THEN THEY CAN PARTICIPATE IN THE BM OR GM THROUGH VIDEO CONFERENCE.

REGARDS..

TANVEER MD MASOOD

CALCUTTA