Form ADT-1: Appointment of Statutory Auditor
Form ADT-1 is a mandatory filing that companies must submit to the Registrar of Companies (ROC) to intimate the appointment of their statutory auditor. Filed under Section 139 of the Companies Act, 2013, this form ensures that the ROC maintains accurate records of who is responsible for auditing the company's financial statements, thereby upholding corporate transparency and accountability.
The appointment of a statutory auditor is a critical governance requirement for all companies, as the auditor plays a vital role in verifying that the company's financial statements present a true and fair view of its financial position. This guide covers everything you need to know about ADT-1 filing requirements and procedures.
When is ADT-1 Required?
First Auditor Appointment
First auditor must be appointed within 30 days of incorporation (by Board) or within 90 days (by shareholders at EGM if not appointed by Board). File ADT-1 within 15 days of appointment.
Annual Appointment
At each AGM, shareholders appoint/reappoint auditor. If appointing a new auditor (not reappointing existing), file ADT-1 within 15 days of appointment.
Casual Vacancy
If auditor resigns or is removed, fill the casual vacancy and file ADT-1 within 15 days of new appointment.
Reappointment Not Required
If the same auditor is reappointed at AGM, ADT-1 is not required. Only new appointments need filing.
Legal Framework and Due Dates
Governing Provisions
- Section 139: Appointment of auditors
- Section 140: Removal and resignation
- Section 141: Eligibility and qualifications
- Section 142: Remuneration of auditors
- Rule 4: Companies (Audit and Auditors) Rules, 2014
Due Date and Penalty
Due Date: Within 15 days of appointment
Late Fee: ₹1,000 per month of delay
Non-compliance: May affect company compliance rating
Step-by-Step Filing Process
Obtain Consent
Before appointment, obtain written consent from the proposed auditor to act as statutory auditor. The consent must be in the prescribed format and include declaration of eligibility.
Board Meeting
Convene Board Meeting to discuss and approve auditor appointment. Review auditor's credentials, independence, and eligibility. Pass board resolution for appointment.
AGM/EGM (if required)
For annual appointments, shareholders approve at AGM. For first auditor (if not Board-appointed), call EGM within 90 days. Pass ordinary resolution.
Prepare ADT-1
Fill Form ADT-1 with auditor details (name, firm registration number, address), date of appointment, term of appointment, and remuneration details.
Attach Documents
Upload consent letter from auditor, certificate from auditor (Form pursuant to Rule 4), board resolution, and intimation letter to auditor.
Submit Form
Sign with director DSC, pay government fees, and submit. ROC will verify and update auditor details in MCA records.
Required Documents
From Auditor
- ☐ Consent letter to act as auditor
- ☐ Certificate from auditor (Rule 4)
- ☐ Declaration of eligibility
- ☐ PAN of auditor (firm: all partners)
From Company
- ☐ Board Resolution
- ☐ Intimation to auditor
- ☐ Copy of AGM/EGM notice (if applicable)
- ☐ SR copy (if passed)
Auditor Eligibility and Disqualification
Who Can be Appointed?
- • Individual who is a Chartered Accountant (practicing)
- • Partnership firm of Chartered Accountants
- • Limited Liability Partnership (LLP) of CAs
Disqualifications (Section 141)
- ✗ Officer/employee of the company
- ✗ Partner of officer/employee
- ✗ Owes more than ₹1,000 to company
- ✗ Convicted of fraud (last 10 years)
- ✗ Auditor of more than 20 companies
Term and Rotation Requirements
| Company Type | Maximum Term | Cooling-off |
|---|---|---|
| Individual Auditor | 5 years (1 term of 5 years) | 5 years |
| Audit Firm | 10 years (2 terms of 5 years) | 5 years |
Note: Listed companies and certain other prescribed companies must rotate auditors after completion of maximum term.
Penalty for Non-Compliance
| Violation | Penalty |
|---|---|
| Late filing (per month) | ₹1,000 per month |
| Company | ₹25,000 to ₹5,00,000 |
| Officer in default | ₹10,000 to ₹1,00,000 |
Auditor Resignation and Removal
Auditor Resignation (ADT-3)
If auditor resigns, file Form ADT-3 within 30 days. Auditor must file statement with ROC and company. Reasons for resignation must be disclosed.
Auditor Removal
Removal before term expiry requires special resolution, previous approval of Central Government, and opportunity for auditor to be heard. File ADT-1 for new appointment.
Best Practices for Auditor Appointment
Selection Process
- ✓ Check auditor eligibility
- ✓ Verify no disqualifications
- ✓ Consider rotation requirements
- ✓ Assess independence
Compliance
- ✓ Obtain consent before appointment
- ✓ File ADT-1 within 15 days
- ✓ Maintain proper documentation
- ✓ Inform previous auditor (if change)