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Change of Auditor in India

Q: Is it mandatory to change the auditor every 5 years for a small private limited company?

No, small private limited companies are not required to change their auditor every 5 years. The mandatory auditor rotation rules apply mainly to listed companies and larger private companies, as per the Companies (Audit and Auditors) Rules, 2014.

Q: Who files Form ADT-3, the company or the auditor?

Form ADT-3 is filed by the resigning auditor. They must submit it to both the company and the Registrar of Companies (RoC) within 30 days of their resignation.

Q: What happens if we want to remove our auditor but the Central Government denies our application in Form ADT-2?

If the Central Government rejects the application in Form ADT-2, the company cannot remove the auditor before their term ends. The existing auditor will remain in office until the term expires or a valid new application is submitted with justifiable reasons.

Q: Can we appoint a new auditor without getting an NOC from the old one?

Yes, it is legally possible to appoint a new auditor without a No-Objection Certificate (NOC) from the outgoing auditor. However, obtaining an NOC is considered good professional practice and helps ensure a smooth handover by clarifying any outstanding issues.

Q: How do we fill the vacancy if our auditor resigns?

When an auditor resigns, it creates a casual vacancy. The Board of Directors can appoint a new auditor within 30 days of the resignation. This appointment must then be approved by the members at a general meeting held within three months. The newly appointed auditor will serve until the next Annual General Meeting.

Q: What is the procedure for the change of auditor in an AGM?

The process to change an auditor at the AGM includes: The Board of Directors recommends whether to appoint a new auditor or reappoint the existing one. Shareholders are notified of the AGM, including the appointment on the agenda. At the AGM, shareholders pass an Ordinary Resolution to appoint the new auditor. The company files Form ADT-1 with the Registrar of Companies within 15 days to officially notify of the appointment.

Q: Do tax audit fees change when we change our auditor?

Yes, tax audit fees are not standardized and are negotiated with the auditor. A new auditor may quote a different fee based on the company's size, transaction volume, and complexity.

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Frequently Asked Questions (FAQs)

What is the difference between an ordinary and a special resolution for changing an auditor?

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An ordinary resolution requires a simple majority (over 50%) and is used for routine matters like appointing or re-appointing an auditor at the end of their term. A special resolution needs at least 75% approval and is required for major decisions such as removing an auditor before their term ends.

Is it mandatory to change the auditor every 5 years for a small private limited company?

Who files Form ADT-3, the company or the auditor?

What happens if we want to remove our auditor but the Central Government denies our application in Form ADT-2?

Can we appoint a new auditor without getting an NOC from the old one?

How do we fill the vacancy if our auditor resigns?

What is the procedure for the change of auditor in an AGM?

Do tax audit fees change when we change our auditor?

Why Choose RegisterKaro for a Change in Auditor Service?

Changing an auditor involves legal paperwork, board approvals, and filings with the ROC. RegisterKaro simplifies this process with reliable and expert support. Here's why businesses choose us:

Experienced Legal Team: We assist with drafting board and shareholder resolutions and ensure all filings are done correctly.
End-to-End Service: From document preparation to ROC filing, we manage the entire process.
Timely Processing: Our team works efficiently to complete the auditor change without unnecessary delays.
Affordable Plans: We offer clear and cost-effective pricing with no hidden charges.
Reliable Compliance Assurance: All steps are aligned with MCA rules to reduce legal risks.

Why Choose RegisterKaro for a Change in Auditor Service?

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