PROCEDURE FOR APPOINTMENT OF FIRST AUDITOR
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 by passing a board resolution 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.
Note:
Appointment of first auditors in general meeting.—A company in general meeting may appoint the first auditor by passing an ordinary resolution 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.
There is no need to file form 23B for the appointment of first auditor.
PROCEDURE FOR APPOINTMENT OF REGULAR AUDITOR AT THE AGM
Section 224 governs the appointment of auditors. The auditors are to be appointed by the shareholders of the company in an annual general meeting by passing an ordinary resolution. Kindly note appointment of Statutory under section 224(1) is an ordinary business read with Section 173 of the Companies Act, 1956.
Section 224(1) state that every company shall, at each annual general meeting, by passing an ordinary resolution appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.
1. First consider the appointment of external auditor in the board meeting and pass a board resolution recommending the candidature of external auditor to the shareholders.
2. Put the agenda for the appointment of external auditor in the AGM notice.
3. On due date pass an ordinary resolution for the appointment of external auditor.
4. Intimate the auditor regarding his appointment within 7 days of appointment in AGM. After receiving intimation from the company it is duty of the auditor to inform ROC about his appointment through filing of form 23B within 30 days of intimation from company.
5. Do not forget to collect a written certificate from the auditor or auditors proposed to be so appointed to the effect that the appointment or re-appointment, if made, will be in accordance with the limits specified in sub-section (1B).
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