Appointment of First Auditor

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Overview

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.

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Appointment of First Auditor

ParticularsWho can appoints the auditorDue date for appointment
Tenure of appointment
For Non-Government CompanyThe 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 the Board of Directors (BOD): Within 30 days of the company’s incorporation date. If the BOD fails to appoint and members appoint: Within 90 days of the information being provided at an Extraordinary General Meeting.The auditor’s term ends after the first annual general meeting (AGM).
    
For Government CompanyThe first auditor appointed by the CAG or Board of Directors or members of the company in case of Govt. Company.CAG Appointment: Within 60 days of company incorporation. Board of Directors (BOD) Appointment: Within 30 days if the CAG fails to appoint an auditor within their initial 60-day window. Member Appointment (at EGM): Within the next 60 days if the BOD also fails to appoint an auditor after the CAG’s initial failure.The auditor’s term ends after the first annual general meeting (AGM).