Re-appointment of auditor

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19 April 2017 Is it possible to reappoint the first auditor of a company in the first annual general meeting for a term of five years???

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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19 April 2017 yes, it will not be consider as re-appointment

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Guest

Guest (Querist)

21 April 2017 While googling the above doubt, i happened to notice the personal view of a Company Secretary on the matter which is as follows: "since subsection (1) of section 139 is subject to sub section (2) and (6), the appointment till 6th AGM is subject to the condition of 5 year term stipulated in subsection (2). Hence if such a Company falls under section 139(2), reappointment of first auditor as Auditor at the first AGM shall be for 4 years i.e. till the conclusion of 5th AGM and not 6th AGM. "

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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20 July 2025 Great question! Let me clarify the position regarding re-appointment of the first auditor under the Companies Act, 2013, especially Section 139.

Key Provisions of Section 139 of the Companies Act, 2013:
Section 139(1):
The Board of Directors shall appoint the first auditor within 30 days from the date of registration of the company.
If the Board fails to do so, members shall appoint within the next 30 days at an extraordinary general meeting.
Section 139(2):
The first auditor shall hold office till the conclusion of the first Annual General Meeting (AGM).
Section 139(6):
At the first AGM, the company shall appoint an auditor who shall hold office from the conclusion of that AGM till the conclusion of the sixth AGM, i.e., a term of five consecutive years.
Your question:
Is it possible to reappoint the first auditor at the first AGM for a term of five years?
According to the strict reading of the Act:
The first auditor holds office only till the conclusion of the first AGM (Section 139(2)).
At the first AGM, the company appoints an auditor for a term from the conclusion of the first AGM till the conclusion of the sixth AGM (Section 139(6)), i.e., a 5-year term.
This auditor may be the same person/entity as the first auditor, but their appointment as auditor from first AGM onwards is a new appointment under Section 139(6).
Therefore, at the first AGM, the company does not "reappoint" the first auditor for 5 years in the literal sense, but rather appoints an auditor (who can be the same person) for a 5-year term.
Explanation of the Company Secretary’s view you mentioned:
The CS is saying:
Since Section 139(1) appointment is subject to Sections 139(2) and 139(6), the term is effectively till the 5th AGM (4 years after the 1st AGM).
This interpretation is incorrect because Section 139(6) clearly states the term is till the 6th AGM, i.e., 5 years.
The law is clear: appointment at first AGM is for a 5-year term until the conclusion of the sixth AGM.

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