Dear members
A private limited company wants to appoint first auditors. The company has not yet conducted its first AGM , it has elapsed about one year since incorporation. Is there any time limit for the appointment of auditors . Can the board appoint the auditor till next AGM ?
Also please forward me the specimen resolution for the appointment ?
thanks
regards
neeta
Dear Neeta,
First Auditor is to be appointed by Board within 30 days of Incorporation.
Failure to which Co. has to appoint Auditors in the General Meeting.
I don't think now Board can appoint Auditor's.
| Originally posted by : Neeta | ||
 |
Dear members A private limited company wants to appoint first auditors. The company has not yet conducted its first AGM , it has elapsed about one year since incorporation. Is there any time limit for the appointment of auditors . Can the board appoint the auditor till next AGM ? Also please forward me the specimen resolution for the appointment ? thanks regards neeta |
 |
Dear Neeta,
As per Sec 224(5), THE BOARD has to appoint FIRST AUDITOR WITHIN ONE MONTH FROM REGISTRATION OF THE COMPANY.. Tanure of Office = Upto the conclusion of next AGM..
In case of failure of Board to appoint the first auditors within 1 month, the Appointment shall be made by MEMBERS IN GM by OR..
Articles naming the first Auditors are VOID.. [Ref - ICAI Compendium of Opinions]
Practical Reply for ur case :
If the company is not maintaining Minutes of Meetings, then the company has option to save itself from this default of appointing First Auditor :-
1. Show a board meeting within 1 month from the incorporation.
2. Appoint first Auditor in that meeting, take a consent later from that auditor from back date.. [first auditors are not required to inform the registrar as to whether they have accepted the appointment or not..]
So ur problem will be solved practically..
Adarsh
Find below the resolution for appointment of First Auditors
“RESOLVED THAT pursuant to the provision of section 224 of the Companies Act, 1956, M/s A Jain & Associates, Chartered Accountants of Meerut from whom certificate pursuant to section 224(1B) of the Companies Act has been received, be and are hereby appointed as the first auditors of the company to hold office until the conclusion of the first annual general meeting of the company at a remuneration to be determined by the Board of directors of the company.
RESOLVED FURTHER that Mr. X, Director of the company be and is hereby directed to give intimation of this appointment to the Auditors so appointed.”
Dear Adarsh,
Maintenance of minutes is not an optional requirement of law. It is a mandatory requirement of section 193.
Dear Neeta,
You have 2 choices:
1. If you can amend the minutes then put the appointment of first auditor in the first BM (required to be held within 1 month of registration of company).
Altternate provision is as follows:
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.
2. You may also put the appointment of first auditor in the first GM and if there is no GM till date then you have no choice but to adopt first option. Documentation would be same as suggested by Adarsh.
Best Regards
Ankur Sir...
I know that MINUTES maintenance is mendatory...
But, most of private companies are not maintaining the same.. So, i suggest her a practical solution...
Adarsh
Thank you so much Ankur sir and Adarsh , my query is solved , Thanks once again for prompt and perfect replies.
Regards
Neeta
CAclubindia
