Form ADT-1: Appointment of Auditor 

Every business is expected to perform several audits as per the applicability via a certified auditor. The form ADT-1 is filed by companies to intimate the ROC regarding their appointment of an auditor. Under the Companies Act, 2013, companies are required to file the form ADT-1 post AGM whichever year they appoint a new auditor or change the existing auditor.

What is the purpose of the appointment of an Auditor?

An auditor is obliged by statute to review the company’s accounts, make sure the company is compliant with the required laws and notify the board of the company’s actual financial status. They ensure that the company is safe and stable. An auditor seeks to protect the shareholders’ interests; they give their independent opinion to the company’s owners or shareholders.

Procedure for appointment of an Auditor

First Auditor Appointment

In compliance with the Companies Act 2013 provisions, the Company’s first Auditor has to be named by its Board within 30 days from the date of incorporation. If the Board does not select an auditor, the Members shall appoint an auditor by way of an Extraordinary General Meeting within 90 days.

At the end of the first Annual General Meeting, an auditor is legally required to be retained in the organization; the company is then required to file the ADT-1 form with the Company Registrar by paying the specified fees.

Exception: In the case of government companies, the Comptroller and Auditor-General of India shall appoint the first auditor within sixty days from the date of the company’s incorporation. If the Auditor General of India does not nominate such an auditor within that time, the auditor is appointed by the Board of Directors within the following thirty days. The auditor is appointed as the First Auditor who shall hold office until the close of the First Annual General Meeting.

Subsequent Auditor Appointment

Any subsequent auditors can only be appointed by the members of the company. The tenure of subsequent auditors is up until the 6th meeting after their appointment.

Filing ADT-1

ADT-1  is an e-form required to be filed on the website of the MCA (Ministry of Corporate Affairs) by companies.

When to file?

• Newly incorporated companies must file ADT-1 within 15 days of their first board meeting. This is due to the fact that the first board meeting of a company is required to be held within 30 days of incorporation, and the agenda for that meeting is required to be the appointment of an auditor. Hence all in all, newly incorporated companies have a maximum of 45 days from incorporation to file their first ADT-1
• For pre-existing companies,  ADT-1  is required to be filed within 15 days of their AGM (Annual General Meeting), the agenda of that AGM is required to consist of appointing or re-appointing an auditor.

What documents are required to file ADT-1?

There are only 4 documents required to be attached to the form:

1.  The first document required is a copy of the board resolution or resolution passed at the AGM regarding the appointment of the auditor.

2.  Secondly, written consent from the auditor approving his appointment is required.

3.  The Auditor is also required to submit a certification that states that they are not ineligible or disqualified to be appointed as an auditor under section 141 of the Companies Act.

4.  Finally, a copy of the intimation given by the company to the auditor regarding his appointment needs to be attached.

How to file ADT-1 e-form on the MCA website?

• Firstly the form needs to be downloaded from the company forms download page on the MCA website.
• Then you are required to duly fill out the form.
  The mandatory information that needs to be filled in the form consists of the following:

1. The company’s corporate identification number
2. The nature of the appointment of the auditor and the period of time they shall audit.
3. PAN card number and address of the auditor or auditor’s firm,
4. The membership number of the auditor or the auditor’s firm’s registration number.
5. The details of an auditor who has vacated the office, if any.
6. The membership number of the auditor who has vacated the office or the registration number of the auditors firm they were associated with.
7. The reason for the auditor having vacated the office

(Note: Clicking the ‘pre-fill’ button in section 1 of the e-form automatically fills in most of the required details about your company. However, if there are any edits required, you can always go and manually edit those specific fields or not click on the ‘pre-fill’ button.) 

•  The 3rd step required you to attach scanned digital copies of all of the above-mentioned required documents.
• Using a digital signature certificate, authorized director is required to sign the e-form
• Nearing the bottom of the form, you will find the ‘check form’ button; clicking on that button lets you know if there are any errors in the form or any mandatory fields you have missed.
•  If there are issues discovered by the ‘check’ button, you can then click on the modify button, which is placed subsequently, and edit the required parts of the e-form. Keep going back and forth until the check button shows no errors.
•  Finally, before submitting the form, be sure to click on the ‘pre-scrutiny’ button. This button shows if there are any errors in the subject matter of the details filled in.
• Once ‘pre-scrutiny’ comes back error-free, click on ‘submit’ to upload your form.
• The e-form is auto-approved. 
• Upon successful filing of the form, email regarding the same is sent to the company’s registered email ID

Fees for filing the form

The form’s fees are directly related to the share capital of the company:

• For companies whose share capital is less than 1,00,000, the fee for ADT-1 is INR 200.
• For companies whose share capital is between 1,00,000 and 4,99,999, the form fee is INR 300.
• For companies whose share capital value is between 5,00,000 and 24,99,999, a form fee of INR 400 is levied.
• For companies whose share capital value ranges from 25,00,000 to 99,99,999, the form fee is INR 500.
• For all companies whose share capital value is greater than or equal to 1,00,00,000, the form filing fees are NR 600.

Is it Mandatory to File ADT-1?

Every company is legally mandated to file ADT-1 whenever they appoint an auditor.. The only exception is for the appointment of the first auditor. In case of the appointment of the first auditor, companies are not required to file ADT-1; however, for good practice, we suggest that ADT-1 be filed then as well.

Penalty for non-filing of ADT-1

There are heavy penalties imposed for non-filing of ADT-1

• In case of a delay of up to 30 days, you’ll be charged twice the normal fees.
• In case of a delay of more than 30 days but less than 60 days, you’ll be charged four times the normal fees.
• In case of a delay of more than 60 days but less than 90 days, you’ll be charged six times the normal fees.
• In case of a delay of more than 90 days but less than 180 days, you’ll be charged ten times the normal fees.
• In case of a delay of more than 180 days, you’ll be charged twelve times the normal fees. 

Filing your ADT-1 is a mandatory compliance requirement that every company should ensure they do not miss out on to avoid heavy penalties.

Frequently Asked Questions

What is form ADT-1?

Form ADT-1 is a form that all companies are required to file to intimate the ROC whenever they appoint an auditor (exception: appointment of 1st auditor).

Do One Person Companies have to file ADT-1?

All companies, including OPCs are required to file ADT-1 whenever they appoint a new auditor (exception: appointment of 1st auditor).

Does the company Auditor have to file ADT-1?

No, it’s the responsibility of the company to file ADT-1, not the auditor. This is a company filing regarding the auditor; hence it’s the responsibility of the company.