The Companies Act 2013 prescribes a specific procedure for auditor resignation and appointment. The Auditor is appointed in the companies under section 139 and resigns under section 140 of the Companies Act, 2013.

This article discusses the formalities and procedures required for auditor resignation and appointment.

Auditor Resignation and Procedure of Filing Form ADT 3

After providing a notice for resignation to the company, an auditor shall file a statement in the form of ADT-3 form. This statement shall be sent to the ROC within 30 days from the date of the resignation.

Details Required in ADT-3 Form

1. Name of the auditor’s firm.

2. Address of the resigning auditor firm.

3. Reasons of resignation

4. Email address of the auditor firm

5. Resigning auditor firm’s contact numbers.

6. Permanent account number of the auditor firm.

7. Copy of the form ADT3 must be digitally signed by any one member of the auditor firm.

If the resigning auditor fails to intimate ROC regarding resignation within the prescribed 30 days time, he is charged penalty ranging from Rs. 50,000 to 5 lakhs.

Stepwise Procedure for Auditor’s Resignation

The procedure for an auditor’s resignation must be followed in the below mentioned sequential form. A careful  execution of the below-mentioned steps will avoid any error in the process:

  1. First of all, the auditor has to submit the resignation letter and Form ADT3 to the company.

  2. A board of meeting shall be organized with all the directors for effecting the resignation.

  3. The company shall obtain a consent letter from the new auditor firm under section  139 and 141, Companies Act 2013.

  4. A board of meeting shall be called. All the members of the company shall be called in the meeting for filling the vacancy of the auditor.

  5. The proposed Auditor/Auditors’ Firm is to be appointed in such meeting held.

  6. Intimate the Appointed auditor/ Auditors’ firm regarding the date of appointment.

File the form ADT-1 for the appointment of the new auditor.

After the resignation of an auditor, a company has to carry out prescribed formalities/ Procedures for appointing new auditor.

Documents Required for Appointment of New Auditor

When a company appoints a new auditor, following documents shall be filed by the company.

  1. Form MGT-14 with a copy of the resolution passed in the board meeting.

  2. Form ADT -1 to be filed with the ROC.

Information to be Submitted to ROC for Auditor Appointment

  1. Name of the new auditor firm.

  2. Address of the new auditor firm.

  3. Email address and PAN number.

  4. Number of years for which the firm is appointed.

  5. Information of the resigning auditor firm.

  6. Date of appointment of the new auditor firm.

  7. Digitally signed Form ADT 1 (with signature of the director of the company).

The ADT-1 form shall be filed within 30 days from the date of the appointment of the new auditing firm.  Every company has to follow the prescribed rules as per Companies Act for resignation and appointment of an auditor firm.

Those were all we had to share on provisions and procedure related to appointment and resignation of auditor, please visit us for any queries.

Auditor Appointment vs Auditor Resignation — Forms, Timeline & Authority

Aspect Auditor Appointment Auditor Resignation
Key Forms ADT-1 (filed with ROC); Board resolution (MGT-14 where applicable) ADT-3 (filed by the resigning auditor with ROC)
Timeline ADT-1 within 30 days from the date of appointment ADT-3 within 30 days from the date of resignation
Authority Involved Board meeting; members to fill vacancy; ROC filing Auditor notifies company; auditor files ADT-3 with ROC
Penalty (non-filing) Non-compliance may invite action under the Companies Act (file ADT-1 on time). Failure to file ADT-3: penalty ₹50,000 to ₹5,00,000

Auditor Change Flow: Resignation → ROC → New Appointment

  1. Auditor serves resignation notice to the company
  2. ⬇
  3. Auditor files ADT-3 with ROC within 30 days of resignation
  4. ⬇
  5. Company convenes Board meeting; seeks consent of proposed auditor (Secs. 139 & 141)
  6. ⬇
  7. Members’ meeting to fill the vacancy; appointment finalized
  8. ⬇
  9. Company files ADT-1 with ROC (within 30 days of appointment); MGT-14 (where applicable)
  10. ✅

Auditor Appointment & Resignation — FAQs

Is ADT-3 mandatory for auditor resignation?
Yes. After giving resignation notice to the company, the auditor must file ADT-3 with the ROC within 30 days of resignation. Non-filing can attract a penalty of ₹50,000 to ₹5,00,000.
Who can sign ADT-1?
ADT-1 (for appointment of auditor) must be digitally signed by a director of the company.
What happens if a company doesn’t appoint a new auditor on time?
The Board/members must promptly fill the vacancy and complete ROC filing (ADT-1 within 30 days of appointment). Delay risks non-compliance under the Companies Act and potential regulatory action. For case-specific guidance, seek professional advice.
Return to Articles Page