First auditor of private company

Hello Anil,

As per Section 139(6) of the companies Act 2013, Appointment of first auditor of the company

Appointment of auditor shall be made by the Board within 30 days of the registration of the company. If the board fails to appoint the first auditor within 30 days, than the board shall inform the members of the company who shall appoint the first auditor of the company within 90 days by calling EGM.

Thanking You

Ori=ginally posted by : Arpit Pachisia
	Hello Anil, As per Section 139(6) of the companies Act 2013, Appointment of first auditor of the company Appointment of auditor shall be made by the Board within 30 days of the registration of the company. If the board fails to appoint the first auditor within 30 days, than the board shall inform the members of the company who shall appoint the first auditor of the company within 90 days by calling EGM. Thanking You

Thanks for your reply Arpit. In the case I have mentioned, Board has not failed to appoint. They have appointed but auditor refused the appointment.

Hi Anil,

The normal procedure for appointment of auditors is that the auditors are first approached for appointment and they will give the declaration as required and then they are appointed by the BOD......

In your case i guess this has not happened....however have you filed Form ADT1 (erstwhile form 23B) for appointment....please revert

Thanks for your message Vandana.

The case i have mentioned is not about declaration or informing ROC regarding appointment. The question is - In case of refusal by first  auditor appointed by Board to audit for any reason what is the next step as per companies Act 2013. Kindly quote section if possible.

Dear Anil,

In your case board has duly appointed the first Auditor through a Board Resolution. However new Auditor refuse to accept the appointment. It means no auditor appointed in the board meeting.

Now as per section 139(6) power to appoint first Auditor lies with the shareholders in the EGM. Now it is duty of the Board to intimate the shareholders about this issue and request them to appoint first Auditor within 90 days as mentioned in section 139(6).

Revert if there is any doubt.

Thanks

Hello Anil,

 In that case also appointment will be done by the shareholders in the companies EGM.

Thank you Ankur Sir / Vandana Madam,

I believe if auditor is appointed by AGM , ROC has to be informed

What happens if first auditor is appointed at EXTRA ordinary general meeting and NOT ANNUAL GENERAL Meeting. 

The question pertains to a private limited company. Please quote sections if possible.

:

Can anybody tell me that in a case if company is fail to appoint first auditor in Board meeting within 30 days or also not called any egm within 90 days then what is the procedure to appoint first auditor

My views please:

1) Company takes letter of consent and willingness to  act as auditor from the auditor and based on that Board passes resolution for appointment within 30 days u/s 139(6) and auditor is informed accordingly.  Consent letter of auditor is in the form of "offer" and Board resolution is  "acceptance" and thus contract is complete within the meaning of Contract Act.

2) No return is required to be filed with ROC for such first appointment by the Board.

3) Now auditor does not want to take up the assignment.  It amounts to resignation and there is casual vacancy in the office of  auditor.  Such vacancy can be filled by the Board u/s 139(8)(i) to hold  office upto the next AGM.  This is to be approved by members in general meeting within 3 months as provided therein.

4) In the AGM auditor can be appointed u/s 139(1) and ADT.1 needs to be filed as an attachment to GNL.2 within 15 days of AGM.

5) In case Board fails to  appoint first auditor within 30 days and also fails to call EGM for appointment within 90 days, it will amount to contravention of Sec.139(6) and penal provisions will follow.  In such a situation keeping in view spirit of Sec.139(6) it would be advisable to make appointment of first auditor in EGM/AGM only.