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CA Pratik Anand

Form ADT-3 is to be filed for resignation by auditor from the company as an auditor within 30 days of resignation.

E Form ADT-3 is required to be filed pursuant to Section 140(2) of the Companies Act, 2013 and Rule 8 of the Companies (Audit and Auditors) Rules, 2014 which are reproduced for your reference.

Section 140:

(2) The auditor who has resigned from the company shall file within a period of thirty days from the date of resignation, a statement in the prescribed form with the company and the Registrar, and in case of companies referred to in sub-section (5) of section 139, the auditor shall also file such statement with the Comptroller and Auditor-General of India, indicating the reasons and other facts as may be relevant with regard to his resignation.

Rule 8:

Resignation of auditor For the purposes of sub-section (2) of section 140, when an auditor has resigned from the company, he shall file a statement in Form ADT-3.

Purpose of the eForm

Auditor resigning from the company shall file within 30 days from the date of resignation, a statement in Form ADT-3 with the registrar. This E-Form has been introduced in the Companies Act 2013.

Penal provisions

As per Section 140(3), If the auditor does not comply with sub-section (2), he or it shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

Therefore, if the auditor fails to inform the ROC about the resignation then there may be penalty of Rs. 50,000/- to 5 lacs.

The auditor has to state the following in the E-form ADT-3:

  • The date of resignation will be the date written in the resignation letter.
  • The auditor has to state the exact reasons for resigning. These are written in the resignation letter as well as the form ADT-3.
  • Other facts relevant to resignation can be anything which is necessary for the company as well as the ROC to know with regard to the resignation.
  • Since this form is a declaration by the auditor, therefore has to be signed by the auditor only.

Sequence of events for Resignation of Existing Auditor and appointment of New auditor will be as follows:

For the Company

1) Receive the Resignation Letter alongwith Form ADT-3 from the resigning Auditor.
2) Call a Board Meeting for acceptance of the resignation.
3) Call a Board Meeting for filing the Casual Vacancy and approve the notice for EGM.
4) Hold the EGM and approve the Auditor’s Appointment.
5) Now file Form No.MGT-14 for the filing of the Resolution passed at EGM
6) File ADT-1 for new Auditor’s Appointment.

For Resigning Auditor

  • File ADT-3 alongwith resignation letter with company.
  • File ADT-3 alongwith resignation letter and reasons for resignation with ROC.

The 30 days time for filing ADT-3 with the ROC starts from the date of resignation i.e the date written in the resignation letter.

The fee for filing ADT-3 depends on the nominal share capital of the Company:

Nominal share Capital in Rs. Fee for ADT-3
Less than Rs. 1,00,000/- 200/-
1,00,000/- to Rs. 4,99,999/- 300/-
5,00,000/- to 24,99,999/- 400/-
25,00,000/- to 99,99,999/- 500/-
1,00,00,000 & above 600/-

 In case of delay Additional fees will be levied as follows:

Period of Delay Additional fee
Delay upto 30 days 2 times of normal fees
30-60 days 4 times of normal fees
60-90 days 6 times of normal fees
90-180 days 10 times of normal fees
Above 180 days delay 12 times of normal fees

Hope you find the above information in order.

(The author is a CA in practice at Delhi and can be contacted at: E-mail: capratikanand@gmail.com, Mobile: +91-9953199493)

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Author Bio

Qualification: CA in Practice
Company: Pratik & Associates
Location: New Delhi, New Delhi, IN
Member Since: 10 Jun 2017 | Total Posts: 52
Pratik Anand is the founder of youronlinefilings.com, an online startup for business registrations, annual business compliance services, Tax filings, book keeping, legal consultancy etc. He is a Chartered accountant by profession and has special flair and expertise in the area of direct Taxation. H View Full Profile

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10 responses to “Auditor Resignation, Compliance & Filing of ADT-3 form”

  1. Siddharth says:

    Are these provision applicable the private companies?

  2. E P KATHIRVEL says:

    well written and useful article

  3. neha says:

    What if the auditor is replaced in AGM . What is the procedure if a new auditor is appointed in AGM by the company.

  4. PALLAVI says:

    what is the impact of 140(3) if we late file the form. do only late fine will be levied or also penalty.

  5. neepa says:

    What if the auditor is replaced in AGM . What is the procedure if a new auditor is appointed in AGM by the company.

    Thanks.

  6. Aakash Jain says:

    Sir, Do we need to file Form MGT-14 in this case.
    Because Section 139(8) of Companies Act, 2013 wants ONLY the Confirmation by shareholders at EGM. There is nowhere specified that it requires to be confirmed by Special Resolution.???

    Thanks

  7. Vedika Bhangre says:

    What when an auditor resign at the year ending, after expiry of his tenure/term of appointment and re-appointed as an auditor for the subsequent financial year. Whether form ADT 3 is required?
    Vedika Bhangre

    • jyoti sharma says:

      if auditor resign in the month of august before signing balance sheet. then can we appoint new auditor in EGM in month of september for signing balance sheet for that period and upcoming 5 years.

  8. ananthavardhana says:

    excellent and informative article.avardhana

  9. K.N. AJMERA says:

    If an auditor whoes period is determined and he is not willing to be appointed as an auditor for succeeding period whether this action would be treated as an ‘RESIGNATION’ AND he will have to make compliance as stated in your ‘Article’

    K.N. AJMERA

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