Private Limited Company should appoint its first Auditor within 30 days from date of incorporation on MCA. A company should pass the Resolution in Board Meeting and mention the appointment of first auditor in the meeting minutes.
Sample of Meeting Minutes: Appointment of First Auditor
The Chairman stated that pursuant to Section 139 of Companies Act, 2013, First Auditors are to be appointed within 30 days from the registration of the Company. For this purpose, “______ Chartered Accountants have been approached to act as the first auditors of the Company. A letter from ______ Chartered Accountants conveying their consent was placed before the Directors. The Board after discussion passes the following Resolution:
” RESOLVED THAT, ________ Chartered Accountants, be and are hereby appointed pursuant to Section 139(6) of the Companies Act, 2013 as the first Auditors of the Company at such remuneration as may be fixed by the Board in consultation with the Auditors to hold office from the date of this meeting till the conclusion of the First Annual General Meeting of the Company.”
Once the Private Limited Company will pass the resolution in the board meeting, company sends appointment letter to auditor. The auditor send back a consent letter to the company to accept the appointment.
Every company has to appoint an individual or a firm as an auditor at the first annual general meeting. The company can appoint an auditor for each financial year or for 5 consecutive financial years.
The directors of the company usually appoint the first auditor of a company. The shareholders may appoint the first auditor. The company appoints the auditor each year at the Annual General Meeting who holds office for the coming years.
After incorporation of a company, the Board of Directors must appoint the first auditor in the first Annual General Meeting. The statutory auditor will typically hold the term till the conclusion of the 6th AGM. The appointment of Statutory Auditor can also be made for a period of 1 year and should be renewed at each annual general meeting.
Before the appointment of the Auditor, a written consent along with Certificate must be obtained from the CA, that he/she is eligible for appointment as Auditor of a company and that the proposed appointment is in accordance with the Companies Act