Non-Appointment of Auditor
Section 139(10): Company ₹25,000–₹5,00,000; officers ₹10,000–₹1,00,000 each.
Change your statutory auditor with complete MCA compliance. ADT-1 filing, board resolutions and auditor appointment in 3 to 5 working days .
Talk to a company compliance specialist and complete ADT-1 filing within the 15-day deadline.
Government Authority / MCA — sample official certificate
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Change of auditor is the process of replacing a company’s statutory auditor through resignation, removal, rotation or casual vacancy under Sections 139 and 140 of the Companies Act, 2013, requiring Form ADT-1 filing within 15 days of appointing the new auditor.
Every company must have a statutory auditor under Section 139. When the auditor changes — due to end of 5-year term, resignation, removal, mandatory rotation or casual vacancy — the company must pass the required resolutions, obtain consent and Section 141 eligibility certificate from the new auditor, and file Form ADT-1 on the MCA V3 portal.
| Scenario | Legal Basis | Resolution | Forms | Timeline |
|---|---|---|---|---|
| Completion of 5-year term | Sec 139(1) | Ordinary | ADT-1 | 7–10 days |
| Auditor resignation | Sec 140(2) | Board + EGM | ADT-3 + ADT-1 | 5–7 days |
| Removal by shareholders | Sec 140(1) | Special (75%) | ADT-2 + MGT-14 + ADT-1 | 30–60 days |
| Mandatory rotation (listed) | Sec 139(2) | Ordinary | ADT-1 | 7–10 days |
| Casual vacancy | Sec 139(8) | Board | ADT-1 | 3–5 days |
| First auditor (2025 rule) | Amendment 2025 | Board | ADT-1 | 3–5 days |
Determine whether the change is due to resignation, removal, rotation, casual vacancy or end of 5-year term. Each scenario has different forms and timelines.
Convene a Board meeting and pass a resolution to change the auditor. For removal, the Board must also recommend a special resolution to shareholders. Record minutes carefully.
Get a written consent letter and Section 141 eligibility certificate from the proposed auditor. Verify membership and that they do not exceed the 20-company audit limit.
For AGM change: ordinary resolution. For removal: special resolution (75%) and file MGT-14 within 30 days. Casual vacancy from resignation needs EGM within 3 months.
For removal before term expiry, file Form ADT-2 with the Central Government within 30 days of the special resolution. Approval takes 30–60 days.
At the AGM (or Board meeting for casual vacancy), formally appoint the new auditor. Term runs until the conclusion of the 6th consecutive AGM.
File ADT-1 within 15 days of appointment. Attach board resolution, auditor consent and Section 141 certificate. Pay government fee (₹200–₹600). Sign with director’s DSC.
If the auditor resigned, the outgoing auditor must file Form ADT-3 within 30 days. This is the auditor’s obligation. Follow up to confirm submission.
Update Register of Auditors, Board minutes book and annual return records. Retain documents for 8 years. Inform bank and stakeholders of the new auditor.
Passed by the Board of Directors approving the auditor change and, where applicable, recommending a special resolution.
Written consent from the incoming auditor or firm accepting the appointment under Section 139.
Certificate confirming the new auditor is not disqualified under Section 141 of the Companies Act.
Valid Certificate of Practice from the relevant regulatory body for the incoming auditor/firm.
Valid Class 3 Digital Signature Certificate of the authorised signatory director for MCA filing.
Resignation letter (ADT-3); for removal: special resolution, MGT-14 and Central Government approval via ADT-2.
| Delay Period | Penalty Multiplier | Example (₹300 base fee) |
|---|---|---|
| Within 15 days (on time) | 1x (normal fee) | ₹300 |
| Up to 30 days late | 2x | ₹600 |
| 31 to 60 days late | 4x | ₹1,200 |
| 61 to 90 days late | 6x | ₹1,800 |
| 91 to 180 days late | 10x | ₹3,000 |
| Beyond 180 days | 12x | ₹3,600 |
Section 139(10): Company ₹25,000–₹5,00,000; officers ₹10,000–₹1,00,000 each.
Resigning auditor faces ₹50,000–₹5,00,000 penalty for not filing ADT-3 within 30 days.
Removal without Central Government approval via ADT-2 is legally invalid; directors may face personal liability.
| Parameter | ADT-1 | ADT-2 | ADT-3 |
|---|---|---|---|
| Purpose | Notice of Appointment | Application for Removal | Notice of Resignation |
| Filed By | Company | Company | Auditor (not company) |
| Filed With | ROC (MCA) | Central Government | ROC (MCA) |
| Deadline | 15 days from appointment | 30 days from special resolution | 30 days from resignation |
| Resolution | Ordinary or Board | Special (75%) | N/A |
| Common Scenario | Every auditor change | Forced removal only | Voluntary resignation |
Most auditor changes only require ADT-1. ADT-2 is for forced removal before term expiry. ADT-3 is the auditor’s personal filing obligation upon resignation.
Board proposes removal and recommends a special resolution to shareholders.
Special notice at least 14 days before the general meeting. Company forwards notice to the auditor immediately.
Outgoing auditor has the right to make written representations, which must be circulated to shareholders.
Shareholders pass special resolution. File Form MGT-14 with ROC within 30 days.
Apply to Central Government for removal approval within 30 days of the special resolution.
Central Government examines and grants or denies approval (30–60 days). Without approval, removal is invalid.
Appoint new auditor and file ADT-1 within 15 days of the new appointment.
| Parameter | Individual Auditor | Audit Firm |
|---|---|---|
| Maximum Term | 1 term of 5 consecutive years | 2 terms of 5 consecutive years (10 years) |
| Cooling-off Period | 5 years before reappointment | 5 years before reappointment |
Section 139(2) mandates auditor rotation for listed companies and prescribed classes of companies. Private limited companies are not subject to mandatory rotation.
14 July 2025. ADT-1 is now mandatory even for first auditor appointments by the Board.
Previously, first auditor appointments by the Board did not require ADT-1. That exemption no longer applies.
Companies incorporated after 14 July 2025 must file ADT-1 within 15 days of the Board appointing the first auditor.
All auditor appointments — first, subsequent, or change — now require ADT-1 filing with the ROC.
Specialists experienced in resignation, removal, rotation and casual vacancy scenarios, with complete MCA V3 portal support.
Board resolution, auditor consent coordination, Section 141 certificate, ADT-1 filing, ADT-3 follow-up and updated Master Data.
Standard auditor changes processed in 3 to 5 working days, with focus on filing well within the 15-day window.
Clear with dedicated professional support. Government fees charged separately at actuals with no hidden charges.
Pass a board resolution, obtain consent and Section 141 eligibility certificate from the new auditor, pass the required shareholder resolution (if any), appoint the new auditor, and file Form ADT-1 within 15 days of appointment. For removal before term, Central Government approval via ADT-2 is also required.
Form ADT-1 is the Notice of Appointment of Auditor filed with the ROC on the MCA portal within 15 days of appointing a new auditor. Government fee is ₹200–₹600 based on share capital. It is mandatory for every auditor appointment, including first auditors (from 14 July 2025).
Corporate Mart provides transparent, tailored assistance based on your entity structure and state requirements. Contact our expert team for a detailed proposal. Government fee for ADT-1 is ₹200–₹600. Standard changes typically total ₹3,199–₹3,599. Removal scenarios cost more due to ADT-2 and MGT-14 filings.
Late filing attracts a multiplier of 2x to 12x the normal government fee depending on the delay period. For a ₹300 base fee, the maximum penalty is ₹3,600 (beyond 180 days).
Form ADT-3 is filed by the resigning auditor (not the company) within 30 days of resignation. Non-filing attracts a penalty of ₹50,000–₹5,00,000 on the auditor. The company should follow up to confirm submission.
Only for forced removal before the term expires (Section 140(1)). Standard changes at AGM (end of term), resignation and casual vacancy do not require Central Government approval. Simply not reappointing at AGM is not “removal”.
No. Mandatory auditor rotation under Section 139(2) applies to listed companies and prescribed classes of companies. Private limited companies are not subject to mandatory rotation.
Yes, from 14 July 2025. The Companies (Audit and Auditors) Amendment Rules, 2025 made ADT-1 mandatory even for first auditor appointments by the Board. The earlier exemption no longer applies.
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