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Appointment of first auditor

Ashutosh (Article Assistant) (72 Points)

06 June 2012

A Pvt. ltd. Co. has appointed its first auditors within 30 days of incorporation. Now there is a conflict between them and the co. wants to remove the first auditor in egm and appoint new dfirst auditor in place of them. Will the time limit for appointment of first auditors within 30 days of incorporation be applicable on this appointment or not?

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4 Replies

CA Ganesh Agarwala (Audit Senior Manager) (239 Points)
Replied 06 June 2012

dear ashutosh,

as far as i know, the first auditors should hold the office till the conclusion of the first gm of the company, where the company appoints the stautory auditor.

as i your in case the company will be elligible to remove the first auditors in the EGM they are going to hold. they need to appoint their new auditors.

[answer subject to mistakes. please cross check]

cheers

ganesh agarwala

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(Guest)

Hi,

Time limit for appointment of first auditors within 30 days of incorporation will not be applicable in this appointment.

Regards

1 Like

Ashutosh (Article Assistant) (72 Points)
Replied 06 June 2012

Thanks a lot neha..

Is there any provision supporting the same contention?

(Guest)

Hi,

Pls read carefully, As per section 224(5), the first auditor or auditors of a company shall be appointed by the Board of

directors within one month of the date of registration of the company; and the auditor or auditors so

appointed shall hold office until the conclusion of the first annual general meeting.

Hence it is very much obvious and implied that once directors have appointed an auditor within 30 days of incorporation then such auditor is FIRST AUDITOR for the purpose of section 224. Once such FIRST auditor is removed by the members in general meeting, then, it is aptly clear that new auditor who is being / will be appointed in place of FIRST MENTIONED AUDITOR can not be considered as FIRST AUDITOR for the purpose of section 224.

Regards.