Appointment of Auditor

Under Section 139(6) of the Companies Act 2013, the Board of Directors must appoint the first auditor within 30 days of incorporation. If the Board fails to act, the members must appoint within 60 days at an extraordinary general meeting. The first auditor holds office until the conclusion of the first Annual General Meeting.

Yes. Section 139(2) of the Companies Act 2013 read with Rule 6 of the Companies (Audit and Auditors) Rules 2014 mandates rotation for listed companies and certain classes of public companies (paid-up share capital of Rs. 10 crore or more, or borrowings/deposits/debentures of Rs. 50 crore or more). An individual auditor cannot be reappointed after one term of 5 consecutive years; an audit firm cannot continue after two consecutive terms of 5 years each. Private companies are generally exempt from mandatory rotation.

Form ADT-1 must be filed with the Registrar of Companies within 15 days of the Annual General Meeting at which the auditor is appointed or reappointed, as required under Rule 4(2) of the Companies (Audit and Auditors) Rules 2014. Late filing attracts additional fees under the Companies (Registration Offices and Fees) Rules 2014.

Before appointment, the proposed auditor must provide a written consent and a certificate confirming eligibility under Section 141 of the Companies Act 2013 — covering independence, absence of disqualifications (e.g., no outstanding fees due from the company, no business relationship), and compliance with the firm-ceiling limits under Section 141(3)(g) read with Rule 10A.

Removal before the expiry of the term requires Central Government approval under Section 140(1) of the Companies Act 2013. The company must pass a special resolution after obtaining prior CG approval via Form ADT-2. Resignation by the auditor requires filing Form ADT-3 within 30 days of resignation. Either path has compliance consequences that must be managed carefully to avoid Section 140(3) penalties.