Appointment of Auditor in Public Limited Company
A public company is a company formed by minimum of 3 directors with no restriction on maximum number of members for incorporation under Companies Act, 2013. Public Limited Company is also covered under the definition of “Company” as covered under the Companies Act, 2013. All companies except Government company are under obligation to appoint first Auditor of the company within 30 days from the date of incorporation of the company. Once the company is registered, first meeting of Board of Directors is conducted for discussing various business matters and take overall review of the business. If the company fails to appoint auditor in board meeting within 30 days then the shareholders may appoint the first auditor of the Company within 90 days from the date of incorporation of the company. Format of Board Resolution for Appointment of Auditor in Public Limited Company is prescribed in sec 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.
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Procedure for appointment of Auditor in Public Company
An Auditor is appointed by simply following the steps as mentioned below-
Step 1: Conduct of Board Meeting
Step 2: Appointment in Board Meeting within 30 days from registration
Step 3: Appointment in Extra Ordinary General Meeting or Annual General Meeting within 90 days from registration (If not appointed in board meeting)
Step 4: Filling of form ADT-1 after Appointment in general meeting
Attachments
- Consent letter for appointment of auditor for 5 years
- Copy of board resolution
- Intimation letter by the Company
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Legal Provisions for Appointment of Auditor of the Company
Appointment of Auditor is mainly regulated by-
A. Companies Act, 2013
As per sec 139(1) of the Companies Act, 2013 every company shall at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting (AGM).
B.Companies (Audit and Auditors) Rules, 2014
Rule 4 of the Companies (Audit and Auditors) Rules, 2014 prescribes that every Company shall inform the auditor concerned of his or its appointment and also file a notice of such appointment with the Registrar in Form ADT-1 within 15 days of the meeting in which the auditor is appointed.
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Resolution for appointment of Auditor in Annual General Meeting
CERTIFIED TRUE COPY OF THE ORDINARY RESOLUTION PASSED IN THE 1ST ANNUAL GENERAL MEETING HELD AT THE REGISTERED OFFICE OF THE ________________ PUBLIC LIMITED COMPANY SITUATED AT —————————————————————— ON ………………………… THE ————- DAY OF ———————– AT 11.00 A.M. AND CONCLUDED AT 11.30 A.M.
Appointment of Auditors and Fixation of their Remuneration
The Chairman informed that the first Auditors of the Company are to be appointed in the Board Meeting within 30 days from the date of incorporation of the company. He informed that he had got consent of (Auditor Name or Firm Name), Chartered Accountants, for their appointment as the first Auditors of the Company. The Board considered and passed the following resolution unanimously:
“RESOLVED THAT pursuant to Sections 139 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification or re-enactment thereof, for the time being in force), the Company hereby appoints of (Name of the Auditor Firm), Chartered Accountants, (Place) having membership no ……………………………. as Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the sixth AGM of the Company.”
“RESOLVED FURTHER THAT Mr./Mrs. …………………………………….., Director of the Company and/or Mr. ………………………………….. director be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary to give effect to this ratification of auditor of the Company.
Passed Unanimously
CERTIFIED TRUE COPY
For ……………………………………… Public Limited
Director Director
DIN:……………………. DIN: …………………..
Place:
Date:
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