ADT – 1

Information to the Registrar for appointment of Auditor

Under the provisions of Section 139 of the Companies Act, 2013, it is mandatory for a company to notify the Registrar of Companies (RoC) regarding the appointment of an auditor. To fulfil this requirement, Form ADT-1 is utilized to inform the RoC about the appointment of the auditor as follows:

  • For appointment of first auditors by Board/members/C&AG
  • For appointment/ reappointment in AGM
  • For appointment of auditor to fill the casual vacancy
  • Auditor appointed in case of non-re-appointment /removal of the previous auditor
  • Auditor appointed by the Tribunal
Applicability:

First Auditors
Type of Company Appointed By Time Limit Term of Office Filing of ADT -1
Government Company Comptroller and Auditor General of India (C&AG) Within 60 days of incorporation* Till the conclusion of the first AGM Within 15 days of appointment
Other than Government Company Board of Directors Within 30 days of incorporation** Till the conclusion of the first AGM Within 15 days of appointment
* If not appointed by C&AG, Board to appoint within next 30 days and if Board also does not appoint, members will appoint within 60 days at EGM
**If not appointed by Board, members to appoint within 90 days at EGM

Subsequent Auditors
Type of Company Appointed By Time Limit Term of Office Filing of ADT -1
Government Company Comptroller and Auditor General of India (C&AG) Within 180 days from the commencement of financial year (Yearly) Till the conclusion of the AGM Within 15 days of appointment
Other than Government Company Members at AGM At AGM every 5 years (5 years) Till the conclusion of every sixth meeting Within 15 days of appointment

Documents required for ADT – 1:

  • Consent of the Auditor/auditor’s firm
  • Certificate from auditor stating that he is not disqualified, satisfies criteria under Section 141, proposed appointment is within limits, no proceedings for professional matters of conduct.
  • Board/members resolution for appointment
  • Copy of order of Tribunal in case auditor is appointed by the Tribunal
  • Copy of the intimation sent by the Company to the Auditor for his appointment
  • Copy of letter of appointment from C&AG where applicable

A retiring auditor can be re-appointed at an Annual General Meeting if:

  • He is not disqualified for appointment
  • He has not given Notice to the company of his unwillingness to be appointed
  • a special resolution has not been passed at that meeting appointing some other auditor or providing expressly that he shall not be re-appointed.

No Listed Company or the following class of companies except One Person Company and Small companies:

  1. Unlisted Public Companies having paid up share capital of Rs. 10 crore or more,
  2. Private Limited Companies having paid up share capital of Rs. 50 crore or more,
  3. All companies having public borrowings from financial institutions or banks or public deposits of Rs. 50 crores or more.

Shall appoint/re-appoint:

  • An individual as auditor for more than one term of 5 consecutive years
  • An audit firm as auditor for more than two terms of 5 consecutive years.

Casual Vacancy in the office of Auditor:

Any casual vacancy in the office of Auditor shall be filled by the Board/C&AG, as applicable within 30 days (By Board for a company other than Government company and by C&AG for a Government Company). If the vacancy is caused as a result of resignation of Auditor, such appointment shall also be approved by the members at a General meeting convened within 3 months of the recommendation of the Board and he shall hold office till the conclusion of the next AGM. In case of a Government Company, if the vacancy is not filled by the C&AG, the Board of Directors to fill the vacancy within next 30 days.

Where ever applicable all appointments/ re appointments to be made after taking into account the recommendations of Audit Committee, if any.

No auditor appointed/re-appointed at AGM:

In any AGM, if no auditor is appointed or re-appointed, the existing auditor shall continue to be the auditor of the company.

Where the auditor has been convicted, he shall refund the remuneration and pay damages.

For partners, liability will be joint and several and in case of criminal liability of an audit firm, partner responsible for fraud shall be liable.

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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