Appointment of first auditor in general meeting

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Sushant Mahajan (Querist)
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11 June 2013 Please tell me the provisions regarding appointment of first auditor in a General Meeting and if there is any time limit on it?

Also, if any penalty is liveable on the Board for not doing so in the first month of incorporation?

Ajay Mishra

Ajay Mishra (Expert)
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14 June 2013 Hi

Appointment of first auditors
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; and the auditor or auditors so
appointed shall hold office until the conclusion of the first annual general meeting. Following provisions
are related to the matter: (Specimen of resolution of the Board has been given in Appendix 1)
(i) Appointment of first auditors in general meeting.—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.
(ii) 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.
(iii) Removal of first auditors.—The company may, at a general meeting, remove first auditor(s) or all
or any of such auditors and appoint in his or their places any other person or persons who have
been nominated for appointment by any member of the company and of whose nomination notice
has been given to the members of the company not less than fourteen days before the date of the
meeting.
(iv) Tenure of office of the first auditor.—The first auditor(s) shall hold office until the conclusion of
the first annual general meeting of the company and then be eligible for re-appointment.

Ajay Mishra

Ajay Mishra (Expert)
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14 June 2013 Procedure to file Form 23B (Appointment of First Auditor)

1. The company will call General Meeting to appoint an statutory auditor, if not appointed at Board Meeting within one month from the date of incorporation of company.
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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Sushant Mahajan

Sushant Mahajan (Querist)
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17 June 2013 Sir, can u please tell me if there is any time limit for conducting General meeting for appointment of first auditor?

It will be a great help.

Please reply Sir.

Ajay Mishra

Ajay Mishra (Expert)
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17 June 2013 yes, the appointment of auditor in general meeting should be completed before the first Annual General Meeting of the company, because the tenure of first auditor will be till the date of first AGM of the company.

Sushant Mahajan

Sushant Mahajan (Querist)
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18 June 2013 Thank you Sir

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