Procedure for appointment of auditor
Intimate the proposed auditor(s) regarding the intention of appointing him/it as auditor and ask whether he/ it is eligible and not disqualified to be appointed as auditor of the company.
Obtain consent & certificate from auditor.
If audit committee required to be constituted under section 177, then obtain its recommendation (Section 139(11)).
Call Board meeting.
Approve the appointment of auditor at the first Board Meeting.
Intimate the auditor and file with ROC form ADT-1 within 15 days of the meeting in which the auditor is appointed.
Does appointment of 1st auditor require obtaining written consent, certificate and filing of form ADT-1 ?
The appointment of first auditor is governed through section 139(6) which starts with a non-obstante clause [notwithstanding anything contained in sub-section (1)] and it is sub-section (1) which requires obtaining consent & certificate from auditor and filing of form ADT-1 with ROC.
For the appointment of auditor for Subsequent to First Auditor/ already incorporated Companies:
As per Section 139 of the Companies act, 2013 and rules made thereunder, Every Company shall appoint the statutory auditor of the Company in its First Annual General Meeting (“AGM”) who shall hold the office of auditor for a period of five years from the conclusion of that AGM until the conclusion of following Sixth AGM of the Company.
Tenure subject to ratification:
The tenure of 5 consecutive years is subject to ratification by shareholders at every AGM.
Intimation to Registrar of Companies for the appointment of auditor:
The company shall file a notice in e-form ADT 1, along with the prescribed fee, of such appointment with the Registrar of Companies within fifteen days of the meeting in which the auditor is appointed.
Example, if the company’s AGM was held on 30 September 201X, then Form ADT 1 has to be filed by 15 October 201X.