Board resolution

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2010 Good evening to all of you.
I am having a doubt regarding the procedure and format of resolution to be passed for appointment of First auditor in the Board meeting.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 December 2010 The first auditor of a company have to be appointed by the Board of Directors with in one month of the date of registration of the company and the auditor so appointed shall hold office until the conclusion of the first AGM of the company. Ref:- section 224 (5) of the Companies Act,1956.

Resolution can be as follows:-

M/s.A & co, Chartered Accountants, 45/210, M.G. Road, Cochin-682016, have consented to act as auditors of the company as per their letter dated the ... day of... 2010, received by the company and placed before the meeting intimating that the said appointment would be in accordance with the limits stated in section 224(1B) of the Companies Act,1956, the Board considered the same.

RESOLVED THAT M/s A & Co, Chartered Accountants, 45/210, M.G.Road,Cochin-682016 be and are hereby appointed as the first auditor's of the company to hold office until the conclusion of the first Annual General Meeting of the company at a remuneration of Rs.......

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 Thank you Chakrapani Sir. Good to have a suitable answer but before the resolution is it require to send a request letter to the proposed auditor about intimation of proposed appointment? if yes how should be the format of the request letter. (As in section 224(5) i think it is necessary to get a written certificate from the proposed auditor to effect that his appointment is valid if made and with in the limit of section 224(1B) )
so what to do before such appointment resolution? Kindly give your suggestion...

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udit sharma

udit sharma (Expert)
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23 December 2010 Hi..

U will have to inform the proposed Auditor, that the BOD of the Company is considering their appointment as First Statutory Auditor of the Company at the First BM of the Company to be held on so and so date and request them to provide a letter to the effect that their appointment if made will be within the limits prescribed under section 224(1B) of the Companies Act, 1956. Such certificate must also be tabled in the First BM for perusal of the Directors before the resolution is passed for appointment of First Statutory Auditor.

God Bless

Udit Sharma

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2010 Nice to hear sir, but when to communicate about the remunaration is it before such request letter or is it after such letter? there should be always some difficult seems as being from company prospective i thought always to have a good auditor with reasonable remunaration pay. but while communicating and sending such letter I thought in my mind that it is better to have two to three auditors at a time so that I can choose one of them who ever offers less remunaration! is my thought is correct?