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CS Executive · Company Law and Practice · Accounts and Auditors

Zenith Pharma Pvt Ltd was registered on 1 June. Its Board failed to appoint the first auditor within the time allowed. Under the Companies Act, 2013, what must the Board do and who then appoints the first auditor of this non-Government company?

If the Board of a non-Government company fails to appoint the first auditor within thirty days of registration, it must inform the members. The members then appoint the auditor at an extraordinary general meeting within ninety days, and the auditor holds office until the first annual general meeting concludes.

  1. AThe Board must inform the members, who appoint the auditor at an extraordinary general meeting within ninety daysCorrect
  2. BThe Board must inform the Registrar, who appoints the auditor within sixty days
  3. CThe Board must inform the members, who appoint the auditor at the first annual general meeting
  4. DThe Comptroller and Auditor-General of India appoints the auditor within sixty days

Explanation

The Board appoints the first auditor within thirty days of registration. If it fails, it must inform the members, who appoint the auditor at an extraordinary general meeting within ninety days. The auditor holds office till the conclusion of the first AGM. The CAG route applies only to Government companies.

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