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An individual auditor who has completed his term of five years shall not be eligible for re-appointment as auditor in the company for five years from the completion term of five years.

An auditor firm who has completed their two terms of five years shall not be eligible for re-appointment as auditor in the company for next five years from the completion of 10 year.

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An individual can serve as an auditor for a term of five consecutive years. A firm can serve two terms of five consecutive years each, i.e., a total of 10 years as an auditor.

Every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting.

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As per Section 139(6) of Companies Act 2013, first auditor will be appointed by the board of directors of company within 30 days of incorporation of company. If the board fails to appoint the first auditor, an extra ordinary general meeting will be called by the board to appoint the first auditor within 90 days from the receipt of the information from the board of directors.

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Applicability of internal audit is as follows:

• Listed company: Always applicable
• Unlisted public company: Where any of the below conditions is satisfied:
  • Paid up share capital >= INR 500 million during the preceding financial year
  • Turnover (income) >= INR 2 billion during the preceding financial year
  • Outstanding loans or borrowings from banks or public financial institutions exceeding INR 1 billion or more at any point of time during the preceding financial year
  • Outstanding deposits >= INR 250 million at any point of time during the preceding financial year
• Private company: Where any of the below conditions is satisfied:
  • Turnover >= INR 2 billion during the preceding financial year
  • Outstanding loans or borrowings from banks or public financial institutions exceeding INR 1 billion or more at any point of time during the preceding financial year

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A director shall be liable for the offences / non-compliances occurred during his tenure even after his resignation and disassociation with the company.

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The books of account shall be preserved by the company for eight financial years preceding the financial year. However, there are certain registers and documents which are required to be kept permanently.

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The company may maintain books of account in either physical or electronic form. In case the books of account are maintained electronically, the back-up of the books of account and other books and papers of the company shall be kept in servers physically located in India on a periodic basis.

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Any company having a paid-up share capital of Indian INR 50 million or above is required appoint a whole-time Company Secretary.

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The assignees would be denied the benefit of short stay exemption under tax treaty as their salary expenditure would be deemed as deduction claimed by the foreign entity. Thus, the salary income earned by expats would become taxable in India.

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No, issue of prospectus is not mandatory in case of Limited Liability Partnership (LLP) in India.

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