Appointment of first auditor of the company

This query is : Resolved

CA Ameya Anil Kulkarni (Querist)
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24 September 2011
The Private limited company was formed in the month of Sept. 10 and were not aware of the fact about the appointment of the auditor in one month.

Now in month of August 2011 they want to appoint auditors for Comapny Statutory Audit for F Y 2010-11 in Board meeting.

Will the said appointment of first director after expiry of one month (rather 11 months) will be valid ?

If not what is procedure that has to be followed by the company for appointment ?

Please Guide.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 September 2011 According to Sec 224 (5)(b) if the Board fails to exercise its power ie to appiont First Auditors, then the Company in General Meeting may appiont First Auditors.

As per Sec: 224 (3) Where at an AGM no auditors are appionted, then the Central Government may appiont a person to fill the vacancy.

Consequences: A Company shall within 7 days of the Central Governments power
under 224(3) becoming exercisable give notice of that fact to that Government, and if the Company fails to do so, then every office of the company who is in default shall be punishable with fine of Rs 5000

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