Appointment of First Auditor under Companies Act, 2013 in Non-Government Companies

"Every company shall, at its first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting until the conclusion of its sixth annual general meeting and thereafter until the conclusion of every sixth meeting, and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed," according to Section 139 of the Companies Act, 2013 (Act).

"Provided also that the company shall tell the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within fifteen days of the meeting in which the auditor is appointed," says the fourth proviso to sub-section (1) of Section 139 of the Act.

"The notification to Registrar concerning appointment of auditor under fourth proviso to sub-section (1) of section 139 shall be in Form ADT-1," according to sub-rule (2) of Rule 4 of the Companies (Audit & Auditors) Rules, 2014.

Thus, an auditor shall be appointed by the Annual General Meeting for a five-year term, and such appointment shall be communicated to the Registrar of Companies in Form ADT-1 within 15 (fifteen) days. Only the fourth proviso to sub-section (1) of Section 139, i.e., for appointment in the annual general meeting, has the requirement of filing such a form been addressed.

In a board meeting, the first auditor is appointed:
According to Section 139 of the Act, the first auditor of a non-government company must be appointed by the Board of Directors within thirty days of the company's registration, and if the Board fails to do so, the members of the company must appoint such auditor at an extraordinary general meeting within ninety days, and such auditor shall hold office until the end of the first annual statutory audit.

Thus, within 30 (thirty) days of the company's establishment, the board of directors shall appoint the first auditor, and no filing or notice in this regard shall be required. Such auditor shall serve until the end of the first annual general meeting, at which time such auditor or another auditor may be chosen for a term of 5 (five) years.

When filing Annual Accounts for the first time, the auditor's details are as follows:
If intimation of appointment of auditor is not needed under section 139(5), (6), or (7) of the Companies Act, 2013, the assistance form proposes entering the SRN 'Z99999999' when filing Form AOC-4.

Summary:
To ensure adequate compliance, one should:

1. Appoint the first auditor in a board meeting by approving a board resolution, who will serve until the first annual general meeting concludes;
2. At the first annual general meeting, appoint an auditor for a tenure of 5 (five) years.
3. Within 15 (fifteen) days of the Annual General Meeting, file Form ADT-1;
4. When filling out Form AOC-4 for the first time, mention SRN Z99999999.