Appointment at the time of Incorporation:
In the case of a private limited company or a public limited company, the first auditor is usually appointed by the Board of Directors within 30 days from the date of incorporation. The auditor appointed at this stage holds office until the conclusion of the first Annual General Meeting (AGM) of the company
Subsequent Appointment:
After the first auditor, subsequent auditors are appointed at each AGM of the company. The appointment of the auditor is subject to approval by the shareholders through an ordinary resolution.
Mandatory Rotation:
As per the Companies Act, 2013, certain companies are required to rotate their auditors periodically. For example, listed companies, certain classes of public companies, and private companies meeting specified criteria are required to rotate their auditors after a maximum term of 5 years.
Filling of Casual Vacancy:
In case of a casual vacancy arising due to the resignation, removal, or death of an auditor, the Board of Directors is responsible for appointing a new auditor to fill the vacancy. This appointment is subject to ratification by the shareholders at the next AGM.