An auditor appointed under section 130
of Companies Act 2013, can resign after his or her appointment. When an auditor
ceases to hold office after resignation as company auditor, the auditor is
obliged under section 140 of companies act 2013 read with rule 8 of the companies (audit and auditors) rules,
2014 to notify registrar of companies or ROC within 30 days from the
date of resignation by Fling a statement in the prescribed form ADT3.
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.
I. RESIGNATION BY THE
STATUTORY AUDITOR AND FILING OF ADT-3 FORM BY RESIGNING AUDITOR
Auditor shall give resignation letter
to the company and shall file the E Form ADT-3 with the concerned Registrar of
companies within 30 days from the date of his resignation. In ADT-3 Forms,
following information need to be given:
(i) Name of Resigning Auditor Firm
(ii) Address of Resigning Auditor Firm
(iii) Ph. No. of Resigning Auditor Firm
(iv) PAN of Resigning Auditor Firm
(v) Registration No. of Resigning
Auditor Firm
(vi) E-Mail of Resigning Auditor Firm
(vii) Reason of Resignation
(viii) To attach the scan pdf copy of
Resignation Letter with ADT-3 Form
(ix) Fill the details of Member who
shall sign the ADT-3 Form with his membership No. and Associate/ Fellow
(x) Digitally sign the ADT-3 Form by
the member of the Resigning Auditor Firm
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.
II. PROCEEDINGS BY
THE COMPANY
The New Auditor Firm
shall be appointed by the company under section 139 (8)(i) of the Companies
Act, 2013 which is read as follows:
(8) Any casual
vacancy in the office of an auditor shall—
(i) in the case of a
company other than a company whose accounts are subject to audit by an auditor
appointed by the Comptroller and Auditor-General of India, be filled by the
Board of Directors within thirty days, but if such casual vacancy is as a
result of the resignation of an auditor, such appointment shall also be
approved by the company at a general meeting convened within three months of
the recommendation of the Board and he shall hold the office till the
conclusion of the next annual general meeting;
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 along with Form ADT-3 from the resigning Auditor. {Format of
Resignation Letter has been attached at end of this Article}
2) Call a Board
Meeting for acceptance of the resignation.
3) Obtain the consent
letter and certification under section 139 and 141 from the proposed New
Auditor Firm.
4) Call a Board
Meeting for filing the Casual Vacancy and approve the notice for EGM. {Format
of Notice for holding EGM has been attached at end of this Article}
4) Hold the EGM and
approve the Auditor’s Appointment.
5) Intimate the New
Appointed Auditor Firm regarding his appointment till the conclusion of ensuing
AGM. {Format of Intimation Letter has been attached at end of this Article}
5) Now file Form
No.MGT-14 for the filing of the Resolution passed at EGM. {Format of Copy of
Resolution passed at EGM has been attached at end of this Article}
6) File ADT-1 for new
Auditor’s Appointment.
III. FILING OF
DOCUMENTS/ E FORMS BY THE COMPANY FOR APPOINTMENT OF NEW AUDITOR FIRM
E Form MGT-14
In E Form MGT-14, copy of resolution
passed at meeting of Member and Explanatory statement under section 102 needs
to be attached
E-FORM ADT-1
DETAILS TO BE FILLED
IN ADT-1 Form
The company shall file the E Form ADT-1
with the concerned Registrar of companies within 30 days from the date of
appointment of New Auditor Firm. In ADT-1 Forms, following information need to
be given:
(i) Name, Address, PAN, Registration
No. and E-Mail Id of New Appointed Statutory Audit Firm of Resigning Auditor
Firm
(ii) Period of accounts for which the
Auditor is appointed
(iii) No. of Financial Years to which
the appointment relates
(iv) No. of Financial Years if the
audit of the company has been done by the Firm in Earlier Years
(v) To Tick the column No. 5 that
Auditor has not been appointed in AGM.
(vi) Date of appointment shall be given
as date of Board Meeting in which he was appointed.
(vii) SRN of ADT-3 need to be given
(viii) Information of the Resigned
Audit Firm
(ix) Attach Intimation Letter, Consent
of New Auditor Firm appointed at EGM and Copy of resolution passed at Meeting
of Members of the company
(x) Digitally sign the ADT-1 Form by
the Director/ Mg. Director of the company
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