Appointing or Reappointing a Statutory Auditor: Form ADT-1 Within 15 Days of the AGM

The statutory auditor checks the company's financial statements and reports to its shareholders. Without an audit report, the company can't adopt its accounts at the AGM or file AOC-4. This applies to every company, including one person companies and small private companies, whatever their turnover. With most AGMs held by 30 September, ADT-1 for appointments made there falls due by mid-October.

Who appoints the auditor, and when

The first auditor holds office only until the end of the first AGM. At that AGM, the shareholders appoint an auditor (the same one or a new one) for the regular five-year term. Government companies are different: their auditors are appointed by the Comptroller and Auditor-General of India under Sections 139(5) and 139(7).

The five-year term and reappointment

An auditor appointed at an AGM holds office from the end of that meeting until the end of the sixth AGM after it, which in practice means five financial years. The company must tell the auditor about the appointment, and must tell the Registrar of Companies (ROC) through ADT-1.

• No annual ratification. The old rule that shareholders had to ratify the auditor at every AGM was removed by the Companies (Amendment) Act, 2017, with effect from 7 May 2018. Once appointed, the auditor continues for the term without a yearly vote.
• Reappointment. At the end of the term, a retiring auditor can be reappointed at the AGM, provided they are not disqualified, have not said they are unwilling, and no special resolution has been passed appointing someone else or saying they should not be reappointed (Section 139(9)).
• If the AGM appoints no one. The existing auditor simply continues in office (Section 139(10)). The company should still regularise the position at the next opportunity.

Removing an auditor before the term ends is harder. It needs a special resolution and prior approval from the Central Government (Section 140(1)). An auditor who resigns must file Form ADT-3 with the ROC within 30 days of resigning (Section 140(2)).

Rotation: which companies must change auditors

Section 139(2) limits how long the same auditor can audit certain companies. Under Rule 5 of the Companies (Audit and Auditors) Rules, 2014, it applies to:

• listed companies;
• unlisted public companies above a prescribed paid-up share capital threshold;
• private companies above a (higher) prescribed paid-up share capital threshold; and
• any company with public borrowings from banks or financial institutions, or public deposits, above a prescribed limit.

For these companies, an individual auditor can serve only one term of five consecutive years, and an audit firm at most two terms (ten years). After that, a five-year cooling-off period applies before the same individual or firm can be appointed again. Small private companies and one person companies are outside rotation, but still need the five-year appointment and ADT-1.

Eligibility, consent and certificate

Only a practising chartered accountant or a CA firm can be appointed (Section 141). Before the appointment, the company must get the auditor's written consent and a certificate confirming that:

• they are eligible and not disqualified under Section 141 (for example, not a relative of a director in a prohibited way, not indebted to the company beyond limits, and not providing prohibited non-audit services under Section 144);
• the appointment is within the limit on the number of company audits one auditor may hold; and
• no proceedings for professional misconduct are pending against them, or details of any that are.

Keep both documents. They are attachments to ADT-1 and the first thing an inspector will ask for.

Filing Form ADT-1, step by step

ADT-1 is the company's notice to the ROC of an auditor's appointment. Under Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014, it must be filed within 15 days of the meeting at which the auditor was appointed. The company files it, not the auditor.

1. Collect the documents: the auditor's consent and eligibility certificate, a certified copy of the board or shareholders' resolution, and a copy of the letter informing the auditor of the appointment.
2. Log in to the MCA V3 portal with the company's credentials and open Form ADT-1.
3. Fill in the details: CIN, the nature of appointment (first auditor, appointment at AGM, reappointment, casual vacancy, and so on), the auditor's name and membership or firm registration number, the period of appointment, and the date of the meeting.
4. Attach the documents and have a director (or other authorised signatory) sign with a digital signature certificate.
5. Pay the filing fee online. The normal fee depends on the company's nominal share capital, as set out in the Companies (Registration Offices and Fees) Rules, 2014. Keep the challan as proof.

Example: if the AGM was held on 30 September 2026, ADT-1 is due by 15 October 2026. Add it to your annual compliance checklist alongside AOC-4 and MGT-7.

Missed the deadline? Fees and penalties

• Late ADT-1: the form can still be filed, but with additional fees that grow with the length of the delay. File as soon as you can, because the extra cost keeps rising.
• Not appointing an auditor at all, or otherwise breaching Sections 139 to 146: Section 147 imposes fines on the company and on every officer in default. Since an audited balance sheet is needed for AOC-4, a missing auditor also leads to defaults on the annual filings.
• Directors are responsible. Appointing the auditor and filing ADT-1 are part of the board's compliance duties. See directors' duties and liabilities.

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