First Auditor Appointment- Each and every Company incorporated in India whether it is a Private Limited Company, Public Limited Company, One-Person Company, Government Company or Subsidiary of foreign Company are required to maintain a proper book of accounts and get audited from the Statutory Auditor. According to the provisions of section 139(6) of the Companies Act, 2013 the first auditor appointed by all Companies other than the Government Company shall be appointed by the Board within 30 days from the date of incorporation of the Company. The tenure of the first auditor shall be till the conclusion of the first annual general meeting of the Company only.
If the Board failed to do this then members of the Company need to conduct an extraordinary general meeting of the members within 90 days from the date of incorporation of the Company to appoint a Statutory Auditor of the Company.
According to the provisions of Section 139(7) of the Companies Act, 2013 every Government company or any other company-owned or controlled, directly or indirectly, by the Central Government, or by any State Government, or Governments, or partly by the Central Government and partly by one or more State Governments the first auditor shall be appointed by the Comptroller and Auditor-General of India within 60 days from the date of registration of the Company.
If the Comptroller and Auditor-General of India do not appoint such an auditor within the said period of 60 days, the Board of Directors of the company shall appoint such an auditor within the next 30 days.
If the Board shall fail to appoint such auditor within the next 30 days, then they shall inform the members of the Company who shall appoint such auditor within the 60 days at an extraordinary general meeting. The tenure of the first auditor shall be till the conclusion of the first annual general meeting of the Company only.
ELIGIBILITY CRITERIA FOR APPOINTMENT OF AUDITOR
A person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant and firm whereof majority of partners practicing in India are qualified for appointment as aforesaid may be appointed by its firm name to be an auditor of a company.
SUBSEQUENT AUDITOR APPOINTMENT
According to the provisions of Section 139 of the Companies Act, 2013 In the case of a Private Company the appointment of an auditor other than the first auditor is done by the members and he/they will hold office till the conclusion of the 6th meeting.
In the case of unlisted and specified Companies, the appointment is done by the members for a maximum term of 5/10 consecutive years.
In the case of Government Companies, the appointment is done by the Comptroller and Auditor General of India within 180 days from the 1st of April.
RIGHTS OF AUDITOR
- Right of access to Books of account and Vouchers
- Right to obtain information and explanation
- Right to visit branch offices and access to branch account
- Right to receive a notice and attend general meeting
- Right to make representation
- Right to report to members
- Right to sign the audit report
- Right of seeking the opinion of an expert
- Right to receive remuneration
PIECES OF INFORMATION AND DOCUMENTS REQUIRED FOR FIRST AUDITOR APPOINTMENT
- Auditor and Firm name, address, pan number, firm registration number and auditor membership number
- Email address and contact number of the Auditor or Firm
- Consent letter
- Eligibility certificate under section 141 of the Companies Act, 2013
- Intimation letter
- Board resolution/ EGM resolution
PROCEDURE TO APPOINT THE FIRST AUDITOR OF THE COMPANY
- Contact Board Meeting
- Pass Board Resolution
- Collect Consent Letter and Eligibility Certificate from Auditor
- Download e-form ADT-1 from MCA Portal
- Fill the e-form properly and attach the mandatory documents i.e. Auditor Consent, Eligibility Certificate, Board Resolution and Intimation Letter
- Upload the e-form ADT-1 and pay the statutory fee
- Download the paid challan and you will get a confirmation email from MCA after successful upload/approval
- Fill the Details and File to the Registrar of Companies within 15 days of Appointment of Auditor of Company
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