Section 139(1)
The first auditor of a company shall be appointed by the BOD within 30 Days from the date of Incorporation of the company and such auditor shall hold office till the conclusion of the 1ST AGM in the case of failure of the Board to appoint such auditor, it shall inform the members, who shall within 90 days at an EGM appoint such auditor.
Every company in its 1st Annual General Meeting shall appoint an auditor (Individual or a Firm) who shall hold office from the conclusion of that meeting till the conclusion of 6thAGM and thereafter till the conclusion of every 6th AGM.
Manner of appointment of auditors
Rule 3 of the Companies (Audit and Auditors) Rules 2014
- Where a company is required to constitute an audit committee under section 177 then the committee and if a company is not required to constitute an Audit Committee, then the Board of director(BOD)of the Company shall consider the qualification of auditor to satisfy itself.
- The audit committee or the Board shall call any relevant information from the auditors as may deem fit.
- The Audit Committee shall recommend to the board the name of the auditors and the board shall consider and recommend the same to the members in AGM for an appointment.
Consent of Auditor
Section 139(1) and Rule 4 the Companies (Audit and Auditors) Rules 2014
- Before appointment the written consent of the Auditor and a certificate shall be obtained from the auditor.
The Auditor shall submit a Certificate that-
- He is not disqualified for appointment under the Act, regulations made there under
- the appointments are as per the terms provided under the act.
- The appointment within the time;
- The proper list of proceedings against the auditors or audit firm pending, if any.
- The notice to the registrar for the appointment of the auditor shall be in form ADT-1 within 15 days from the date of the appointment.
Appointment of auditor in case of Govt. Company Section 139(5)
The CAG of India shall appoint an auditor duly qualified to be appointed as an auditor of companies under this Act, within 180 days from the commencement of the financial year, who shall hold office till the conclusion of the annual general meeting.
Appointment of 1ST Auditor Section 139(6)
The first auditor of a company (except govt. co.), shall be appointed by the BOD within 30 Days from the date of Incorporation of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members, who shall within 90 days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.
ADT-1 is required to file or not??
For the appointment of the first auditor, it is optional for the Company to file Adt-1 with ROC. when we will file Aoc-4 we have to put in SRN of ADT-1,So we can put Z9999999. So, for the appointment of the first auditor filing of ADT-1 is optional.
For the appointment of a subsequent auditor,the Company must file ADT-1 within 15 days of appointing the auditor.
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Posted by:
CS Neetu Saini
AKGVG & Associates