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Under the Companies Act 2013, the Board of Directors is responsible for appointing the first auditor of a company within 30 days of its incorporation. This appointment requires shareholder approval at the company’s first Annual General Meeting (AGM). The first auditor’s term commences from the date of appointment and concludes at the close of the subsequent AGM. To be eligible for appointment, the auditor must possess a valid certificate of practice and meet all other eligibility criteria and not be disqualified under the provisions of the Act. Adherence to the Companies Act 2013 and its associated rules is paramount for the valid appointment of the first auditor.
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). |
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