Under the Companies Act 2013 in India, the appointment of the first auditor of a company is made by the board of directors within 30 days of the incorporation of the company.
The appointment must then be approved by the shareholders at the first annual general meeting (AGM) of the company. The first auditor's term will begin from the date of appointment and continue until the conclusion of the next AGM.
The auditor appointed should hold a valid certificate of practice and must be eligible for appointment as per the provisions of the Act.
Additionally, the auditor should not be disqualified from appointment under the Act.
It is important to note that the appointment of the first auditor must be in compliance with the provisions of the Companies Act 2013 and the rules made thereunder.
Particulars | Who can appoints the auditor | Due date for appointment | Tenure of appointment |
For Non-Government Company | The first auditor appointment by the board of directors must be made within 30 days of the company's incorporation, as per the Companies Act 2013 in India. | If appointed by BOD: then within 30 days of the date of incorporation; or If BOD fails & appointed by Members: In that case within 90 days of information at an extra ordinary general meeting; | The auditor's term ends after the first annual general meeting (AGM). |
For Government Company | The first auditor appointed by the CAG or Board of Directors or members of the company in case of Govt. Company. | If appointed by CAG: within 60 days from the date of incorporation or If appointed by BOD: within 30 days of failure of CAG to appoint auditor in 60 days; In case appointed by Members: within next 60 days at extraordinary general meeting BOD also fails to appoint within 30 days after failure of CAG; | The auditor's term ends after the first annual general meeting (AGM). |
A casual vacancy means a vacancy owing to death, disqualification or resignation of the auditor
"A. Non Government Company:
1. In the event of a sudden vacancy caused by resignation or other reasons, the Board of Directors (BOD) must fill the position within 30 days. The members of the company are then required to approve the auditor's appointment during a general meeting within 3 months of the BOD's recommendation.2. The auditor appointed under these circumstances will remain in their role until the end of the next Annual General Meeting (AGM)."
"B. Government Company:
1. In the event of a sudden vacancy, the Comptroller and Auditor General (CAG) must fill the position within 30 days from the date of the vacancy. If the CAG fails to do so, the Board of Directors (BOD) must fill the vacancy within the following 30 days
2. The auditor appointed will serve in their role until the end of the next Annual General Meeting (AGM)."
