BACKGROUND

The appointment of auditor is subject to mandatory by Central Government powers vested through Section 139 of Companies Act, 2013. Company registered in India is required to appoint individual or an audit firm as first auditors within 30 days from date of incorporation. Moreover, accounts of the company are required to be audited by the first auditor itself. The auditor has to prepare his report and file that with Registrar of Companies within the due course of filing date. As per section 139(6) the first auditor of the company shall be appointed by the Board within 30 days of Incorporation. In case of Board’s failure, an Extra Ordinary General Meeting shall be called within 90 days to appoint the first auditor. The law is silent regarding from when this time limit of 90 days be reckoned, it is better to take a stricter view and interpret that the 90 days limit starts from Incorporation rather than expiry of 30 days (i.e. failure of Board) from it.