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Appointment of Auditors
The auditors in the company seek to protect the shareholders’ interests. The auditor is obliged by statute to review the managers’ accounts and notify them of the company’s actual financial status. To ensure that the company is safe and stable, the Auditor gives its independent opinion to the company’s owners or shareholders.
In compliance with the Companies Act’s provisions, after incorporation of a company in the first annual general meeting, an Auditor must be appointed by the Board of Directors. The Auditor will typically hold term till the conclusion of 6th AGM or 5 years. The appointment of an Auditor can also be made for a period of 1 year, renewable at each annual general meeting.
The appointment of First Auditor of the Company must be completed by the Board of Directors within 30 days of incorporation. In case the Board of Directors fail to appoint an Auditor, the members of the company must be informed. The members will then be required to appoint an Auditor within 90 days at an Extra Ordinary General Meeting. An Auditor so appointed will hold office until the conclusion of 1st Annual General Meeting.
ComplianceIndia can help you understand how to register and maintain Annual Compliances of Companies in India quickly and hassle-free
Qualifications of an Auditor
– A person is eligible for the appointment as an auditor only if he is a Chartered Accountant.
– A firm is eligible for the appointment as an auditor only when the majority of its partners are Chartered Accountants practicing in India.
– In the case where a limited liability partnership firm is appointed as auditor, only the partners who are Chartered Accountants will be authorized to act and sign on behalf of the firm.
Section 139
The companies listed in Section 139 (belonging to the class or classes of companies as mentioned in the section) and Rule 5 of the companies (audit and auditor) rules, 2014, will not:
1. Appoint an individual as auditor for more than one consecutive five-year tenure;
2. Appoint an auditing firm for more than two terms of five consecutive years
Provided, the auditor who has finished his term will not be eligible for reappointment in the same company or the auditing firm who has completed a two-year tenure is not eligible for appointment in the same company for five years.
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Documents Required for filing E form ADT-1
A written consent from the auditor.
Copy of Board Resolution of Company
Appointment letter to Auditor.
Name, Address, Email ID and PAN number of the Auditor or Auditor Firm.
A number of years for which the firm is appointed
NOC from old auditors (in case of New Auditors appointment)
Details of the resigning auditor firm, if any.
Our Charges
Our charges for filing of Appointment of Auditors starts from Rs. 1,999/-.
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