Appointment of Auditors – Do not make this mistake


After setting up your Company, one of the questions you may have is – When does your Company need to appoint auditors? Does your Company really need to appoint auditors?

Based on the Companies Act, the directors have the power to appoint auditors within 3 months from the date of incorporation. Very often, a company is unable to decide on whether it needs to appoint auditors so quickly. Simply because, it might be more prudent to defer the appointment of auditors until the company’s performance takes off. So, can the directors still appoint auditors after 3 months from the date of incorporation? If you think the answer is yes, then you are absolutely WRONG!

YOU NEED SHAREHOLDERS’ APPROVAL

Don’t get me wrong. Your Company can still appoint auditors even if you missed the 3-months’ timeline as provided for in the Companies Act. However, instead of getting the Board of your Company to approve the appointment of auditors, you will need to seek approval from the shareholder(s) of your Company.

What if you done it wrong? What if you appointed auditors of your Company way after the 3 months’ timeline and this appointment was done by way of Board approval? Well, this is certainly not provided for in the Companies Act. What you can do to rectify the situation would be to ratify the appointment of auditors via an extraordinary general meeting. What this means is that your Company formalises the appointment of the auditors by obtaining approval from the shareholder(s). 

HOW WE CAN HELP YOU

It is important that your Company starts off on the right footing, else it might become a compliance nightmare in the future for you and your Company. If your Company has yet to appoint auditors and you want to make sure you comply with the regulatory requirements, we are here to help. We have prepared most of the documents required for you. All you have to do is to follow our checklist and fill in the blanks. Here is a peek at how our checklist can help you.

First, we guide you to assess if your Company is required to appoint auditors.

We will also tell you what are the required documents to be prepared. And of course, we have the template documents ready for your use.

Lastly, we guide you on how to deal with the signed documents and the necessary follow-up actions.

VISIT OUR E-SHOP TO FIND OUT MORE

There you go! Together with our template resolutions and forms, you are all set to go. Check out our e-shop to see the complete list of templates when you click on the category – Appointment of Auditors.


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