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Reg appointing a Statutory Auditor

Venkattesh (Director) (28 Points)

05 January 2010  

Hello,

I recently incorporated a PVT LTD company

I have been told that I have to appoint a Statutary auditor  with in one month on company formation

But some CAs  says that its not necessary, its only compulsory for PUBLIC LTD companies

Even If I appoint  then whether I have to inform ROC ?

Please guide me i this

 

Thanks

Venkat.

 


 11 Replies

Ankur Garg (Company Secretary and Compliance Officer)   (114659 Points)
Replied 05 January 2010

APPOINTMENT OF AUDITORS

 

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.

 

First auditors are to be appointed by the Board of directors of every company within one month of the date of registration of the company as per section 224(5).

 

ROC intimation not required on the appointment of first auditor.

1 Like

Ankur Garg (Company Secretary and Compliance Officer)   (114659 Points)
Replied 05 January 2010

In your case you have to appoint first auditors.

 

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:

 

Other provisions regarding First Auditors

 

(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.

 

Best Regards

1 Like

Amir (Learner) (4011 Points)
Replied 05 January 2010

Sec 224(5) reads as follows:-

 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 offices until the conclusion of the first annual general meeting:

Provided that-

(a) the company may, at a general meeting, remove any such auditor 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; and

(b) if the Board fails to exercise its powers under this sub-section, the company in general meeting may appoint the first auditor or auditors

NO INTIMATION TO ROC IS REQUIRED..

Amit Mittal (Student--CA-PCC) (156 Points)
Replied 05 January 2010

Thanks for clarification

Ankur Garg (Company Secretary and Compliance Officer)   (114659 Points)
Replied 05 January 2010

welcome Amit

Venkattesh (Director) (28 Points)
Replied 06 January 2010

Thanks Ankur and Amir

From your replies I understood that I need to appoint FIRST AUDITOR with in one month


I have then following queries,

1) I have appointed a CA who said that he will look after Accounts, Auditing, ROC matters, etc. So I dont need to intimate about his appointment or anything to ROC or anyone . Right?

 

2) as you said " If Board of Directors fail to appoint the FIRST AUDITOR then  Company in genral meeting  may appoint FIRST AUDITOR."  By the term "Company in AGM may appoint..." is it means the Managing Director will appoint auditors in AGM.

3) Can you also explain about issuing share certificate.

 Thanks

Venkat

Ankur Garg (Company Secretary and Compliance Officer)   (114659 Points)
Replied 06 January 2010

1. No intimation to ROC is required.

 

2. Here your interpretation is incorrect. If Board of Directors fail to appoint the FIRST AUDITOR then Company in general meeting may appoint FIRST AUDITOR." 

 

In this case you have to hold this general meeting with in the same one month and let me tell you clearly the general meeting we are talking here is Extra ordinary general meeting which is required to be convened before statutory general meeting u/s 165 (for public company).

 

3. Please explain what exactly you want to know about issuance of share certificate.

 

Regards

 

Venkattesh (Director) (28 Points)
Replied 06 January 2010

Thanks Ankur,

Regarding issuance of share certificate

My Authorized Capital is Rs 100000 .Company incorporated on 10th Dec 2009

In a couple of days I would be opeing a current account and would be depositing Rs 100000.

So I think inorder to have a proof  of paidup capital of Rs 100000 we need to issue share certificate.

Hence I was asking about issuing share certificate.

 

Thnaks Venkat

Ankur Garg (Company Secretary and Compliance Officer)   (114659 Points)
Replied 06 January 2010

Form-2 is not required to be filed for allotment to subscribers because no formal allotment is required in case of subscribers. They are deemed members and shareholders of the Company.

 

DATE OF ALLOTMENT TO SUBSCRIBERS AND DATE TO BE MENTIONED ON SHARE CERTIFICATE

 

Date of allotment to subscribers will be the date of incorporation of the company and the same date will also be used for printing on share certificate to be issued to subscribers.

Practically & legally this is very much possible. To conclude you may use Date of Incorporation of the company for the purpose of:

 

1.      Printing on share certificate of subscribers

2.      as date of Allotment to subscribers

3.      For the purpose of filling the column in register of member to enter the name of subscribers.

 

Even if you receive the amount from subscribers after 6 months the date of deemed Allotment and date on share certificate would remain the same i.e. date of incorporation of the company.

 

In case of any doubt please post it. I’ll definitely try my best to solve it.

 

Best Regards

 

RAMEEZ RAJA (CA FINAL) (23 Points)
Replied 09 October 2011

Dear Ankur,

ROC intimation is not required for first auditor right??

but i went thro this pdf link.. https://www.icai.org/resource_file/15481cas_aud_app.pdf

it says --Notice of appointment to the Registrar 

Every auditor appointed under sub-section (1) shall within thirty days of the receipt from the company of the intimation of his appointment, inform the Registrar in writing that he has accepted, or refused to accept, the appointment. (Section 224(1A)). The intimation to the Registrar is to filed electronically by the auditor in Form No. 23B within 30 days of their appointment. The obligation to give notice to the Registrar is cast only on the auditors appointed under sub-section (1) of sections 224. The first auditors who are appointed by the Board should also file an intimation of their appointment or refusal in Form 23B within 30 days of their appointment.

WHY IS IT MENTIONED THAT FIRST AUDITOR SHOULD MAKE INTIMATION TO ROC??

PL CLARIFY THE SAME. SHOULD I INTIMATE TO ROC FOR APPOINTMENT OF FIRST AUDITOR IN FORM 23B?

PRADEEP MULANI (Partner in MULANI BHANSARI & SHAH )   (137 Points)
Replied 12 November 2013

Dear Ankurji,

Its seen practically that by which SRN the Annual filing Forms 23AC would be done if there is no need for submitting intimation vide Form 23B to ROC within 30 days of the appointment of Auditor by Board of Directors or by General Meeting?

 

Mr.RAMEEZ RAJA also seems right by link of ICAI - DRAFT CORPORATE AFFAIRS STANDARD ON AUDITOR'S APPOINTMENT. 

 

AWAITING YOUR POSITIVE & OPTIMISTIC REPLY..

 


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