Managing Director of Alpha Ltd. himself wants to appoint Mr. R a practicing chartered accountant, as first auditor of the company. Comment on the proposed action of the managing director.

According to Section 139(6) of the Companies Act, 2013 , 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. 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. Wherever a decision is to be taken by the board of directors, such a decision can only be taken in a properly convened board meeting by passing a board resolution. A Managing Director himself is not authorized to take such a decision on behalf of the board of directors. In the present case, the appointment of Mr. R, a practicing chartered accountant, as first auditor by the Managing Director of Alpha Ltd. by himself, if made, will be in contravention of Section 139(6) of the Companies Act, 2013 . Therefore, the action of the Managing Director of Alpha Limited with respect to the appointment of the first auditor of the company is not valid.