Form ADT-1 Filing Online for Auditor Appointment

Form ADT-1 is the required electronic filing that companies submit to the Registrar of Companies (ROC) to announce the appointment of their statutory auditor.

This form publicly identifies the auditor responsible for the company's financial statements and serves as the official notification to the Ministry of Corporate Affairs.

Under the Companies Act, 2013, the responsibility for filing this form shifted from auditors to companies themselves. Previously, auditors filed the appointment form (Form 23B) under the 1956 Act. This change places greater accountability on companies for their regulatory compliance.

Details of the Auditor to be Submitted

When filing the form, you must provide specific details about the auditor, each with a clear purpose:

• Category of Auditor: Individual or Firm.
• Income Tax PAN: A unique identifier for the auditing entity.
• Membership/Firm Registration Number: To verify the auditor's credentials with the Institute of Chartered Accountants of India (ICAI).
• Address and Email ID: For official communication.
• Period of Appointment: Specifies the exact financial years the audit engagement covers. This is critical for tracking the auditor's term.
• Date of Appointment Resolution: The date of the Board Meeting or Annual General Meeting (AGM) where the appointment was approved, which sets the clock for the filing deadline.

Laws Governing the ADT-1 Form

The legal framework for auditor appointments and the filing of Form ADT-1 is primarily governed by:

• Section 139(1) of the Companies Act, 2013: This section in detail covers the rules for the appointment of the first auditor, subsequent auditors, auditor rotation, and the filling of casual vacancies.
• The Companies (Audit and Auditors) Rules, 2014: These rules prescribe the specific procedures, including the mandatory use of the ADT-1 Form for intimation and the detailed content required in the auditor's consent and certificate.

It's crucial to understand that appointing an auditor and filing Form ADT-1 are two distinct steps. The appointment is the company's internal decision, while the form is the external notification to the government.

Think of it this way:

• The Resolution: This is like the "job offer" that legally appoints the auditor. It's the core document establishing their role.
• The ROC form ADT-1: This is the "official announcement" or "registration" of that appointment with the Registrar of Companies (ROC). It's a regulatory formality to keep public records updated.

So, the role of the ADT-1 is purely to inform regulators. It makes sure the Ministry of Corporate Affairs (MCA) has a clear, updated record of who is auditing the company's finances. It's a critical compliance step after an auditor is appointed.

Who Appoints the First Auditor of a Company?

Appointing the first auditor is one of the earliest compliance steps a newly incorporated company must take to ensure financial transparency. The process involves a few key steps and mandatory filings, including the submission of Form ADT-1.

Here’s how the first auditor of a company is appointed, as per Section 139(6) of the Companies Act, 2013:

• Appointment by Board of Directors: The Board of Directors is initially responsible for appointing the first auditor. They must hold a meeting and make this appointment within 30 days of the company's incorporation date, as per Section 139(6) of the Companies Act, 2013.
• Appointment by  Members (if Board fails): If the Board fails to appoint an auditor within those first 30 days, the power shifts to the company's shareholders (members). They must then call an Extraordinary General Meeting (EGM) and appoint the auditor within the next 60 days.
• Obtain Auditor's Consent: Before the appointment is final, the company must get a written consent letter and a certificate confirming the proposed auditor is eligible.
• File Form ADT-1: Once the resolution is passed and consent is received, the final step is the ADT-1 filing. The company must file Form ADT-1 on the MCA portal within 15 days of the resolution date.

Is Form ADT-1 Filing Mandatory for the First Auditor?

The ADT-1 filing requirement for the first auditor is not optional; it's a compulsory rule. Filing Form ADT-1 for the first auditor is a mandatory step under Section 139(1) of the Companies Act, 2013. This legal requirement highlights its importance.

Submitting this form within the set timeframe officially records the auditor's appointment with the MCA. Skipping this step is a direct violation and will lead to penalties (e.g., a fine ranging from ₹25,000 to ₹5,00,000 for the company under Section 147 of the Companies Act, 2013) for the company and its officers who are at fault.

Appointing Subsequent Auditors and Re-Appointing Existing Auditors

After the first auditor's term ends (5 consecutive years), all subsequent auditors are appointed by the company's shareholders during the Annual General Meeting (AGM).

• Appointment for a Five-Year Term: Auditors are usually appointed at an AGM to hold office until the end of the sixth AGM, serving a five-year term. This provides stability in auditing.
• Rotation of Auditors: To ensure independence and prevent conflicts of interest, the Companies Act mandates the rotation of auditors for certain classes of companies:

• • All listed companies.
  • Unlisted public companies with a paid-up share capital of Rs. 10 crore or more.
  • Private limited companies with a paid-up share capital of Rs. 50 crore or more.
  • Companies with public borrowings from financial institutions or public deposits of Rs. 50 crore or more. These companies cannot appoint an individual auditor for more than one term of five years and an audit firm for more than two consecutive terms of five years each. A mandatory "cooling-off" period of five years applies before they can be re-appointed.

• Timeline for Filing: The ADT-1 filing due date for a subsequent auditor is strictly within 15 days from the date of the AGM where they are appointed or re-appointed for a new term. This time limit for filing ADT-1 must be followed to avoid compliance issues.

Filing the ADT-1 form isn't just a regulatory chore; it's a strategic move that underpins your company's stability and reputation. Here’s why:

• Avoids Penalties: Timely filing is the simplest way to prevent heavy financial penalties.
• Official Intimation: It formally notifies the ROC about the auditor's appointment, including their identity and term.
• Ensures Legal Compliance: It keeps the company compliant, maintaining its active status and good legal standing.
• Boosts Credibility: A clean compliance history improves the company's reputation with investors, banks, and potential partners.
• Facilitates Funding: Lenders and investors always conduct due diligence on statutory compliance. A properly filed ADT-1 is a positive signal.
• Promotes Transparency: It ensures the auditor's details are on public record, promoting accountability. This ensures everyone has access to reliable data about your auditing setup.
• Reduces Risk of Financial Errors: Because an independent auditor is formally appointed, it lowers the chance of mistakes or misreporting in your financial statements. This protects your investors and ensures accuracy.
• Good Governance: The form strengthens corporate governance by ensuring the auditor appointment process is properly documented and transparent, which supports government regulation.

Form ADT-1 must be filed by all companies, except Limited Liability Partnerships (LLPs), to officially inform the Ministry of Corporate Affairs (MCA) about the appointment of an auditor. Here's a breakdown of the entities that are required to file:

• Private Limited Companies
• Public Limited Companies
• One Person Companies (OPCs)
• Small Companies
• Dormant Companies
• Listed and Unlisted Companies

Note: LLPs are governed by a separate law (LLP Act, 2008) and are not required to file Form ADT-1.

• Auditor Appointment or Reappointment at the Annual General Meeting (AGM): The most common scenario for filing ADT-1 arises when shareholders, during their Annual General Meeting, approve the appointment of a new auditor or the re-appointment of an existing auditor. This filing formalizes that resolution with the RoC.
• First Auditor Appointment (Mandatory from July 14, 2025): While previously a recommended practice, the Ministry of Corporate Affairs (MCA) has mandated the filing of Form ADT-1 for the appointment of the first auditor for all companies incorporated on or after July 14, 2025. Companies established before this date generally undertook this filing as a matter of good governance.
• Filling of Casual Vacancies: When an auditor's position becomes vacant mid-term (e.g., due to resignation), and a new auditor is appointed, the company is required to file Form ADT-1 to inform the RoC.

To complete the ADT-1 filing, you will need the following key documents, which are attached to the e-form:

1. Consent Letter from the Auditor

A written letter issued by the auditor clearly stating their willingness to accept the role of statutory auditor for the company.

2. Eligibility Certificate under Section 141

The proposed auditor must provide a certificate confirming their eligibility as per Section 141 of the Companies Act, 2013. This certificate should declare that:

• The auditor is not disqualified under the law,
• The number of company audits does not exceed the statutory limit prescribed under Section 141(3)(g), and
• There are no disciplinary or legal proceedings pending against them.

3. Certified Copy of the Board or AGM Resolution

A copy of the resolution passed in the Board meeting or Annual General Meeting (AGM), approving the appointment of the auditor. This document should be signed and certified by an authorized officer or director of the company.

4. Formal Appointment Letter (Optional but Recommended)

While not mandatory, attaching a copy of the formal appointment letter issued to the auditor adds credibility and helps clarify the terms of the engagement, such as the duration and remuneration.

5. Digital Signatures (Mandatory for Filing)

• The e-form must be digitally signed by a Director or Manager of the company.
• Additionally, the form must be certified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA) using their Digital Signature Certificate (DSC).

The ADT-1 filing procedure is conducted online through the MCA V3 portal:

1. Convene a Meeting: Hold a Board Meeting or AGM to pass the auditor appointment resolution.
2. Obtain Auditor Documents: Secure the signed consent letter and eligibility certificate from the auditor.
3. Download Form ADT-1: Access the latest version of the e-form from the MCA portal.
4. Fill the Form: Accurately enter all details, including the Company's Corporate Identification Number (CIN), auditor's details, and appointment tenure.
5. Attach Documents: Attach scanned copies of the required documents (Resolution, Consent, etc.)
6. Digital Signature & Certification: The form must be digitally signed by a Director. It may also require certification by a practicing professional (CA, CS, or CWA) if applicable.
7. File and Pay Fees: Upload the form to the MCA portal and pay the statutory fees for filing ADT-1.
8. Receive Acknowledgment: An SRN (Service Request Number) is generated upon successful submission, which serves as proof of filing.

Form ADT-1 Filing Fees

The ADT-1 is a mandatory form that must be filed within 15 days from the date of the auditor’s appointment. Here’s the detail of government fees, and if not submitted on time, companies are liable to pay additional fees and may face penalties under the Companies Act, 2013.

1. Government Filing Fees

The standard filing fee for Form ADT-1 depends on the company’s authorised share capital. The higher the capital, the higher the fee. Here's the fee structure:

Form ADT-1 is used to notify the Ministry of Corporate Affairs (MCA) about the appointment of a statutory auditor following the Companies Act, 2013. The form must be filed within a prescribed timeline, and its validity is linked to the auditor's term of appointment.

1. Due Date for Filing Form ADT-1

The deadline for filing Form ADT-1 depends on the type of auditor being appointed:

a) Appointment of First Auditor

• As per Section 139(6) of the Companies Act, 2013:
  • The Board of Directors must appoint the first auditor within 30 days of the incorporation of the company.
• Filing Form ADT-1 for the first auditor is mandatory and is recommended for documentation and transparency.
• If the company chooses to file it:
  • It must be submitted within 15 days from the date of the Board Meeting in which the appointment was made.

b) Appointment of Subsequent Auditor

• For auditors appointed or reappointed at the AGM:
  • Filing Form ADT-1 is mandatory.
• As per the rules:
  • The form must be filed within 15 days from the date of the Annual General Meeting in which the auditor's appointment is confirmed.

Illustration:

• If the AGM is held on 25th September, the last date to file ADT-1 would be 10th October.

2. Validity of Form ADT-1

The validity of a filed Form ADT-1 aligns with the duration of the auditor’s appointment.

a) First Auditor

• If Form ADT-1 is filed:
  • The validity extends until the conclusion of the first Annual General Meeting.

b) Subsequent Auditor

• As per Section 139(1) of the Companies Act, 2013:
  • An auditor can be appointed for a maximum term of five consecutive years.
  • ADT-1 filed for such an appointment is valid for the entire approved term.
• There is no need to file Form ADT-1 every year during the auditor’s term unless:
  • There is a change in the auditor,
  • The auditor resigns or is removed, or
  • A new appointment is made after term completion.

Filing Form ADT-1 is a legal requirement under the Companies Act, 2013. If a company does not file it within the due date, it can face penalties and other issues that may affect its operations and reputation.

1. Statutory Violations

Not filing ADT-1 on time goes against the law (Section 139 of the Companies Act). This can lead to legal action under Section 147.

2. Fees for Late Filing

The penalty for late filing of ADT-1 is severe and escalates with the delay. The law prescribes a flat penalty on the company and its officers, and the MCA imposes additional late filing fees on the form itself. The additional fee structure is as follows:

Example: If a company with Rs. 10 lakh authorised capital delays the filing by 100 days, the base fee is Rs. 400. Since the delay is over 90 days but under 180, the payable fee becomes Rs. 400 × 10 = Rs. 4,000.

3. Additional Legal Fees

In addition to the extra fee, non-compliance can attract penalties under Section 450 of the Companies Act, 2013. In such cases:

• The company may be fined up to Rs. 10,000.
• Each officer in default, such as directors, can be fined Rs. 1,000 per day, with a cap of Rs. 2,00,000.

4. Non-Compliant Tag on MCA Portal

The company may be marked as “non-compliant” on the Ministry of Corporate Affairs (MCA) website. This status is visible to the public and can cause problems like:

• Difficulty getting bank loans or credit,
• Trouble bidding for government tenders,
• A bad impression during audits or investor checks.

5. Issues in Future Filings

If ADT-1 is not filed, the auditor's name won’t be updated in MCA records. This can lead to errors or rejection when you try to file other important forms like financial statements or annual returns.

6. Increased Scrutiny from Authorities

Repeated delays or non-compliance may result in notices from the Registrar of Companies (ROC). It may also lead to inspections or deeper checks into the company’s activities.