Appointment of Statutory Auditor(s)

·         Appointment of First Auditors:

As per section 224(5) of the Companies Act, 1956 First Auditors of the Company shall be appointed within 30 days of registration of the Company by the Board of Directors of the Company, and if the Directors fail to appoint the auditor as such, the auditor may be appointed by the members of the Company in general meeting.

The First auditors appointed by the Board shall hold the office till the conclusion of the first annual general meeting unless removed by the shareholders in general meeting by giving at least 14 days prior notice and nominating the new auditors.

·         Appointment of Subsequent Auditors:

As per section 224(1) of the Companies Act, 1956 every company shall appoint the auditor in its annual general meeting who will hold the meeting till the conclusion of the next annual general meeting.

·         Casual Vacancy of the Auditors and Appointment in Casual Vacancy:

Casual vacancy may be of two types:

1.      Caused by death: By death of the auditor in his office, such a vacancy may be filled by the Board by passing a Board Resolution.

2.      Caused by Resignation: Such a vacancy can be filled by the members of the Company in extra-ordinary general meeting.

·         Procedure for appointment of Statutory Auditor:

1.      Before proposing appointment of the auditor, take the letter from the auditor to the effect that if the appointment/re-appointment will be made, it will be within the limit specified u/s 224(1B) of the Companies Act, 1956.

2.      Within 7 days of the appointment/re-appointment of the auditor the Company shall inform the Auditor about the appointment/re-appointment.

3.      Within 30 days of receiving the letter of appointment from the Company the auditor must communicate to the respective ROC about the appointment by filing e-form 23B.

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          Remuneration of the Statutory Auditor:

The remuneration of the auditor shall be decided in the general meeting or by the Board if they authorised to do so in the general meeting. If in the general meeting the resolution mention as “such remuneration as may be agreed by the Board and the auditors” then after general meeting a Board meeting need to be conducted for determination of remuneration of the auditor.