Appointment of First Auditor (Section 139(6) & 139(7))
# Section 139 – Appointment of First Auditor
## 1. First Auditor – Non-Government Company [Sec 139(6)]
Step
Who Appoints
Time Limit
Tenure
1
Board of Directors (BOD)
Within 30 days from date of registration of the company
Up to conclusion of 1st AGM
2
If Board fails → Members in EGM
Within 90 days
Up to conclusion of 1st AGM
## 2. First Auditor – Government Company / Govt-controlled Company [Sec 139(7)]
These include:
Government Company
Any other company owned/controlled directly or indirectly by Central Govt, State Govt(s), or partly by Central + partly by State
Step
Who Appoints
Time Limit
Tenure
1
Comptroller and Auditor General of India (C&AG)
Within 60 days from registration
Up to conclusion of 1st AGM
2
If C&AG fails → BOD
Within next 30 days
Up to conclusion of 1st AGM
3
If BOD also fails → Members in EGM
Within next 60 days
Up to conclusion of 1st AGM
## 3. Subsequent Auditor in Government Company [Sec 139(5)]
C&AG appoints the auditor within 180 days from commencement of the FY
Tenure: Till conclusion of the next AGM
## 4. Subsequent Auditor in Non-Government Company [Sec 139(1)]
Normal manner:
Audit Committee (if any) → recommends to BOD
BOD → recommends to Members
Members in AGM appoint
Tenure: From conclusion of 1st AGM till conclusion of 6th AGM (i.e., for 5 years), subject to ratification (ratification requirement now removed)
Worked example
### Example 1
Example: XYZ Pvt. Ltd. was incorporated on 1-Apr-2024. Its Board failed to appoint the first auditor within 30 days. What next?
The members must appoint the first auditor in an EGM within 90 days from the date of information given by the Board. The first auditor will hold office until the conclusion of the first AGM.
### Example 2
Example: A Government Company was incorporated on 1-Jan-2024. C&AG did not appoint the auditor within 60 days.
Then BOD must appoint within next 30 days (i.e., by 1-Apr-2024). If BOD also fails, members must appoint in EGM within next 60 days.
⚠️ Common exam mistakes
Confusing the 30-day Board timeline (non-govt cos) with the 60-day C&AG timeline (govt cos).
Forgetting that in Govt cos, if C&AG fails, the BOD (not members directly) gets the next opportunity.
Confusing first auditor tenure (till 1st AGM) with subsequent auditor tenure (till 6th AGM = 5 years).
Assuming members get 90 days from registration – they actually get 90 days from the date of information by the Board about Board's failure.
Bare-Act text Section 139(6) & 139(7) · Companies Act, 2013 · click to expand
Section 139(6): Notwithstanding anything contained in sub-section (1), the first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within thirty days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of the company, who shall within ninety days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.