Appointment of auditor

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Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2013 Dear Experts,

Please help me in solving this problem. Its very urgent.

A company is incorporated on Dec'10 but the company has still not appointed any auditor till date and have not submitted annual return.

Now the company wants to appoint an auditor.
what should be the procedure?
should the company file 24a to Central Govt for appointing auditors??

and what may be the penalties for company for this non compliance?

Ajay Mishra

Ajay Mishra (Expert)
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24 August 2013 Hi
Firstly you appoint first auditor in general meeting, if the Board has not appointed a first auditor. So call a general meeting in 2010 and appoint first auditor.

Procedure to file Form 23B (Appointment of Auditor)

1. The company will appoint an statutory auditor at general meeting
2. Send letter of appointment to auditor within seven days from the appointment.
3. The auditor give letter of acceptance as auditor to the company.
4. The auditor also intimate ROC in Form 23B within 30 days from the date of acceptance of letter of appointment.
5. Form 23B can be download from www.mca.gov.in
6. Letter of appointment will be attached with Form 23b.
7. The SRN no will be generated with fee.

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Ajay Mishra

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24 August 2013 In subsequent year you will appoint at every AGM and file Form-23B with late payment by auditor.

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2013 Thanks a lot sir for your revert
Please suggest me can we have a AGM in back date and appoint the auditor?
I think in this case two penalties will be levied
on auditor for late filing 23b
on company for non-intimating to ROC about the appointment of auditor.

Please correct me if i am wrong sir, and give your valuable suggestion on this

Ajay Mishra

Ajay Mishra (Expert)
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24 August 2013 Yes, you will always face penalties, because you have not complied provision at that time.

All other annual filing will also face the same penalties, like Form-23AC & ACA, Form-20B.

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 Thanks a lot sir,

Could you please suggest can the company choose its first accounting year as 15 months

There is nothing specified in AOA of the company about accounting year

weather any resolution is to be passed for choosing the period of accounting year???

Ajay Mishra

Ajay Mishra (Expert)
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25 August 2013 Yes, you can have your first financial year for 15 months.

Ajay Mishra

Ajay Mishra (Expert)
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25 August 2013
The expression 'Financial year' defined under section 2(17) means, in relation to any body corporate, the period in respect of which any profit and loss account of the body corporate laid before it in annual general meeting is made up, whether that period is a year or not. A company is at its liberty to follow any financial year whether or not it ends on 31st March. However, for the purpose of Income Tax, accounts will have to be made on 31st March.

The period to which the balance sheet and profit and loss account to be laid before a company in Annual General Meeting relate is called a "financial year".

Section 210(4) provides that a financial year may be less or more than a calendar year, but it shall not exceed fifteen months. The financial year may extend to eighteen months, where special permission has been granted in this connection by the concerned Registrar of Companies [Proviso to section 210(4)]. Thus, annual accounts may be prepared for a period up to eighteen months with the special permission of the Registrar on the application submitted in the new e-Form 61 electronically with the Registrar [prescribed by the Notification No. GSR 56(E) dated 10th Feb., 2006.

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Ajay Mishra

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25 August 2013
FINANCIAL YEAR OF THE COMPANY

The Board discussed the matter of fixing financial year of the Company and passed the following resolution :

“RESOLVED THAT the first “Financial Year” of the Company be the period starting from the date of incorporation of the Company viz [First Financial year] both days inclusive, and the first statement of accounts of the company shall relate to the same period.

“RESOLVED THAT the second and subsequent “Financial Year” of the company be the period from 1st April to 31st March, in each year unless decided otherwise.”

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Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 Sir,

Thanks a lot for all your prompt and quick responses.

Sir, do the company need to pass any resolution for choosing the period of financial year?
in the AOA of the company Year means a "calender year"

Ajay Mishra

Ajay Mishra (Expert)
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25 August 2013 AOA is correct, don't worry.

Yes such resolution should be passed in first board meeting.

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