10 November 2010
XYZ Ltd. is incorporated on 01.11.2010. As per section 224(5), the Board of Directors will have to appoint the auditors within one month from the date of incorporation. So can someone tell me the procedure to appoint the auditors?
You generally call a first Board Meeting to consider all agenda items which is required to pass in first Board Meeting including appointment of first Auditor.
After appointment you send a letter of appointment to Auditor for acceptance of appointment.
Yes you are absolutely right that the First Statutory Auditors can be appointed by the Board of Directors within 1 month from the date of incorporation.
Either you can appoint the Auditors in the First Board Meeting or any other Board Meeting to be held within 1 monnth from the date of incoporation.
In my opinion, the procedure for appointment of First Statutory Auditor should be as follows:
1. Convene a Board Meeting after giving notices to all the Directors in accordance with the provisions of section 285 of the Companies Act, 1956.
2. At the Board Meeting, place before the Board brief work profiles of various Chartered Accountants or reputed firms of Practicing Chartered Accountants for perusal of the Directors.
3. Pass a resolution for appointment of First Statutory Auditors who shall hold the office till the conclusion of the First Annual General Meeting of the Company.
4. Intimate the Statutory Audtors so appointed giving the details of appointment.
5. The Chartered Accountant/ Firm of Praticing Chartered Accountants appointed as the Statutory Auditor of the Company should intimate the R.O.C in prescribed Form 23B. This is not mandatory but it is a good practice to give the details of the appointment to the Registrar. No filing fees is payable for Form 23B.
This is my understanding of the provisions of the Companies Act, 1956 and the views of eminent experts are welcome:)
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