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Change of Auditor in Company
Change your statutory auditor with complete MCA compliance. ADT-1 filing, board resolutions, and auditor appointment handled by our CA/CS team in 3 to 5 Working Days @ ₹2,999
100% Online Process. No Hidden Fees. Resignation, Removal, and Rotation Covered.
Form ADT-1 Filing with MCA
Board Resolution Drafting
New Auditor Consent Letter
Section 141 Eligibility Certificate
EGM/AGM Resolution Drafting
Resignation Letter Processing (ADT-3 coordination)
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Change of auditor is the process of replacing a company's statutory auditor through resignation, removal, rotation, or casual vacancy under Sections 139 and 140 of the Companies Act, 2013, requiring Form ADT-1 filing within 15 days.
File Form ADT-1 with MCA within 15 days of appointing a new auditor
Government fee: ₹200 to ₹600 based on nominal share capital
IncorpX handles complete filing starting at ₹2,999 in 3 to 5 working days
Post 2025 Amendment (effective 14 July 2025), ADT-1 is mandatory even for first auditor appointments
Late filing attracts penalties up to 12x the normal government fee
Every company registered under the Companies Act, 2013 must have a statutory auditor appointed under Section 139. When this auditor needs to be changed, whether due to resignation, removal by shareholders, mandatory rotation for listed companies, casual vacancy from death or disqualification, or simply the completion of the 5-year term, the company must follow a specific procedure and file Form ADT-1 with the Registrar of Companies within 15 days. The 2025 Amendment Rules (effective 14 July 2025) now require ADT-1 even for first auditor appointments by the Board, closing an earlier exemption. The process involves passing board and shareholder resolutions, obtaining consent and Section 141 eligibility certification from the incoming auditor, and electronic filing on the MCA V3 portal. Government fees range from ₹200 to ₹600, while late filing attracts penalties up to 12x the normal fee.
This process applies to private limited companies, one-person companies, and public limited companies alike. Whether you are replacing an auditor after a resignation or rotating auditors at a listed company to meet the Institute of Chartered Accountants of India (ICAI) requirements, the statutory framework remains the same. Companies that maintain annual compliance for private limited company obligations find this filing straightforward. For companies handling multiple event-based ROC filings, auditor change is one of the most time-sensitive items on the compliance calendar. Also read about who needs statutory audit and when for complete context.
Complete ADT-1 filing, board resolutions, and MCA compliance in 3 to 5 working days.
Reasons for Changing Auditor in a Company
A company's statutory auditor can change for 8 distinct reasons. Each scenario triggers different forms, resolutions, and timelines. Understanding your specific situation is the first step toward compliant filing. Companies also managing annual ROC filing requirements or annual return filing (AOC-4 and MGT-7) should coordinate auditor change timing with the AGM cycle. Related company changes like director appointment procedure often happen at the same Board meeting.
Scenario
Legal Basis
Who Initiates
Resolution Type
Form Required
Timeline
Completion of 5-year term
Section 139(1)
Company (at AGM)
Ordinary Resolution
ADT-1
7 to 10 working days
Auditor resignation
Section 140(2)
Auditor
Board + EGM
ADT-3 (auditor) + ADT-1
5 to 7 working days
Removal by shareholders
Section 140(1)
Company (shareholders)
Special Resolution (75%)
ADT-2 + MGT-14 + ADT-1
30 to 60 days
Mandatory rotation (listed co.)
Section 139(2)
Company (at AGM)
Ordinary Resolution
ADT-1
7 to 10 working days
Casual vacancy (death/disqualification)
Section 139(8)
Board of Directors
Board Resolution
ADT-1
3 to 5 working days
Disqualification under Section 141
Section 141
Automatic vacation
Board Resolution
ADT-1
3 to 5 working days
First auditor replacement at 1st AGM
Section 139(6)
Shareholders (at 1st AGM)
Ordinary Resolution
ADT-1
7 to 10 working days
2025 amendment: first auditor ADT-1 now mandatory
Amendment Rules 2025
Board of Directors
Board Resolution
ADT-1
3 to 5 working days
Across 3,500+ auditor change filings processed by IncorpX, 68% of changes happen at the AGM when the 5-year term ends. Auditor resignation accounts for 22% of cases, casual vacancies for 7%, and forced removal under Section 140(1) for less than 3%. Removal takes the longest (30 to 60 days) due to Central Government approval via Form ADT-2, while standard AGM changes complete in 7 to 10 working days.
Most auditor changes happen at the AGM when the 5-year term ends. Plan at least 30 days before the AGM to have the new auditor's consent letter and Section 141 eligibility certificate ready. This avoids last-minute scrambles and ensures you meet the 15-day ADT-1 filing deadline after the AGM.
Step-by-Step Process to Change Auditor in a Company
Based on our experience with 3,500+ auditor change filings, the process involves 9 steps, takes 3 to 10 working days depending on the scenario, and costs ₹3,199 to ₹3,599 for standard cases. Here is the complete process, which applies to all auditor changes under the Companies Act, 2013. For detailed ADT-1 e-filing instructions, see our complete guide to ADT-1 filing.
Step 1: Identify the Reason for Auditor Change
Determine whether the auditor change is due to resignation (Section 140(2)), removal (Section 140(1)), rotation (Section 139(2)), casual vacancy (Section 139(8)), or completion of the 5-year term. Each scenario has different procedural requirements and timelines. Refer to the scenario table above to confirm which forms and resolutions apply to your situation.
Step 2: Pass a Board Resolution
Convene a Board of Directors meeting and pass a resolution to change the auditor. For removal before term completion, the Board must also recommend a special resolution to be passed by shareholders. Record minutes with quorum details, date, and reason for the change. The Board resolution serves as the first attachment for your ADT-1 filing.
Step 3: Obtain Consent from the New Auditor
The proposed auditor (individual CA or audit firm) must provide a written consent letter and a Section 141 eligibility certificate confirming no disqualification. Verify ICAI membership at icai.org and confirm they do not exceed the 20-company audit limit. The consent letter must reference Section 139 of the Companies Act, 2013.
Step 4: Pass Shareholder Resolution (if required)
For regular change at AGM, pass an ordinary resolution. For removal of auditor before term completion, pass a special resolution requiring 75% shareholder approval, and file Form MGT-14 with the ROC within 30 days. Casual vacancy from resignation also needs shareholder approval at an EGM within 3 months under Section 139(8).
Step 5: Apply for Central Government Approval (removal only)
If removing the auditor before term expiry, file Form ADT-2 with the Central Government within 30 days of passing the special resolution. The Central Government must approve the removal before a new auditor can be formally appointed. Timeline for this approval: 30 to 60 days. The auditor has the right to make representations during this period.
Step 6: Appoint the New Auditor
At the AGM (or Board meeting for casual vacancy), formally appoint the new auditor. The auditor's term runs from the conclusion of this meeting until the conclusion of the 6th consecutive AGM, subject to annual ratification if your Articles of Association still require it.
Step 7: File Form ADT-1 on MCA Portal
File Form ADT-1 (Notice of Appointment of Auditor) on the MCA V3 portal within 15 days of the appointment. Attach the board resolution, auditor consent, and Section 141 certificate. Government fee: ₹200 to ₹600 based on share capital. Sign with the authorised director's DSC. For a step-by-step e-filing walkthrough, visit our page on File Form ADT-1 for auditor appointment.
If the auditor resigned, the outgoing auditor must file Form ADT-3 with the MCA within 30 days of resignation. This is the auditor's obligation, not the company's. Penalty for non-filing: ₹50,000 to ₹5,00,000 on the auditor. Follow up with the outgoing auditor to confirm ADT-3 submission.
Step 9: Update Company Records and Statutory Registers
Update the Register of Auditors, Board minutes book, and annual return records. Retain all appointment documents for 8 years as per statutory requirements. Inform the bank and other stakeholders of the new auditor details. The new auditor will conduct the statutory audit for the appointed period.
ADT-1 must be filed within 15 days of auditor appointment. Late filing attracts penalties up to 12x the normal fee. For a ₹300 base fee, that means a maximum penalty of ₹3,600. File on time to avoid these charges entirely.
IncorpX files your ADT-1 within 3 to 5 working days. Starting at ₹2,999.
Documents Required for Auditor Change Filing
The exact documents depend on the scenario: standard change, resignation, or removal. Here is a complete checklist. You will also need a valid digital signature certificate (DSC) for the authorised signatory director.
Required for All Scenarios
Board ResolutionPassed by Board of Directors approving the auditor change
New Auditor Consent LetterWritten consent from the incoming CA/firm accepting appointment
Section 141 Eligibility CertificateCertificate confirming no disqualification under the Companies Act
ICAI Membership ProofValid Certificate of Practice from the Institute of Chartered Accountants of India
Director's DSC (Class 3)Valid digital signature of the authorised signatory director for MCA filing
Company PAN and CINCorporate Identity Number and PAN for MCA portal identification
Additional for Resignation / Casual Vacancy
Auditor Resignation LetterWritten resignation with effective date and reasons from the outgoing auditor
Shareholder Resolution (Ordinary)For AGM appointment or casual vacancy from resignation (EGM within 3 months)
Additional for Removal Before Term
Special Resolution (75%)Passed by shareholders for removal of auditor before term expiry
Form MGT-14Filing the special resolution with RoC within 30 days
Central Government ApprovalObtained via Form ADT-2 filed within 30 days of special resolution
Collect the new auditor's consent letter and Section 141 eligibility certificate before the Board meeting. This avoids delays between resolution and ADT-1 filing. All documents must be in PDF format (under 2MB each) for MCA portal upload.
The #1 error we see across 3,500+ filings: companies convene the Board meeting before obtaining the new auditor's consent letter and Section 141 certificate. This forces a second Board meeting or delays the ADT-1 filing past the 15-day window, triggering avoidable penalty fees.
Change of Auditor Fees and Government Charges 2026
The total cost of changing an auditor depends on your company's share capital and the scenario. Below is a complete breakdown. IncorpX publishes pricing upfront; most competitors use opaque contact forms without displaying fees.
Government Fee for Form ADT-1 (by share capital)
Nominal Share Capital
Government Fee (₹)
Below ₹1 lakh
₹200
₹1 lakh to ₹5 lakh
₹300
₹5 lakh to ₹25 lakh
₹400
₹25 lakh to ₹1 crore
₹500
₹1 crore and above
₹600
Total Cost by Scenario
Component
Standard Change (₹)
Removal Scenario (₹)
IncorpX Professional Fee
₹2,999
Quoted separately
Government Fee (ADT-1)
₹200 to ₹600
₹200 to ₹600
Government Fee (ADT-2)
N/A
₹200 to ₹600
Government Fee (MGT-14)
N/A
₹200 to ₹600
DSC (if new required)
₹1,500 to ₹2,500
₹1,500 to ₹2,500
Total Estimated
₹3,199 to ₹3,599
₹4,000 to ₹6,000+
IncorpX charges ₹2,999 as the professional fee for standard auditor changes (resignation or term completion). Government fees are charged at actuals based on your company's share capital slab. The market rate for this service ranges from ₹2,499 to ₹4,999 across competitors, most of whom do not display pricing publicly.
Penalties for Late Auditor Change Filing
The 15-day deadline for ADT-1 filing is strict. Late filing penalties are calculated as multiples of the normal government fee. Beyond ADT-1, non-appointment of auditor carries separate penalties under Section 139(10). Track your deadlines using the FY 2026-27 compliance calendar.
ADT-1 Late Filing Penalty Multiplier
Delay Period
Penalty Multiplier
Example (₹300 base fee)
Within 15 days (on time)
1x (normal fee)
₹300
Up to 30 days late
2x
₹600
31 to 60 days late
4x
₹1,200
61 to 90 days late
6x
₹1,800
91 to 180 days late
10x
₹3,000
Beyond 180 days
12x
₹3,600
Other Auditor-Related Penalties
Violation
Penalty on Company
Penalty on Officers/Auditor
Non-appointment of auditor (Section 139(10))
₹25,000 to ₹5,00,000
₹10,000 to ₹1,00,000 per officer
ADT-3 non-filing by resigning auditor
N/A
₹50,000 to ₹5,00,000 on auditor
Improper removal without Central Govt approval
Removal declared invalid
Personal liability on directors
Effective 14 July 2025, ADT-1 filing is mandatory even for first auditor appointments by the Board. Companies incorporated after this date must file ADT-1 within 15 days of the Board appointing the first auditor. Earlier exemptions no longer apply.
Avoid penalties. File within the 15-day window with IncorpX.
ADT-1 vs ADT-2 vs ADT-3: Which Form to File?
The MCA prescribes three ADT forms for different auditor-related filings. Knowing which form applies to your situation saves time and prevents filing errors. For detailed ADT-1 instructions, visit our complete guide to ADT-1 filing.
Parameter
ADT-1
ADT-2
ADT-3
Purpose
Notice of Appointment of Auditor
Application for Removal of Auditor
Notice of Resignation by Auditor
Filed By
Company
Company
Auditor (not company)
Filed With
ROC (MCA portal)
Central Government
ROC (MCA portal)
Deadline
15 days from appointment
30 days from special resolution
30 days from resignation
Resolution Required
Ordinary or Board
Special (75% majority)
N/A
Government Fee
₹200 to ₹600
₹200 to ₹600
₹200 to ₹600
Non-filing Penalty
2x to 12x fee
₹25,000 to ₹5,00,000
₹50,000 to ₹5,00,000 on auditor
MGT-14 Required
No
Yes (for special resolution)
No
2025 Amendment Impact
Now mandatory for first auditor
No change
Revised format
Common Scenario
Every auditor change
Forced removal only
Voluntary resignation
Most auditor changes only require ADT-1. ADT-2 is needed exclusively for forced removal before term expiry (with Central Government involvement). ADT-3 is the auditor's personal filing obligation upon resignation, not the company's responsibility.
How to Remove an Auditor Before Term Completion
Removing a statutory auditor before their 5-year term expires is the most complex auditor change scenario. It requires shareholder approval, Central Government clearance, and multiple filings. The process mirrors the regulatory oversight in remove director from company proceedings and is equally scrutinised. For context on other event-based changes, see adding or removing directors.
Step-by-step removal process under Section 140(1):
Board Resolution: The Board proposes removal of the auditor and recommends a special resolution to shareholders.
Special Notice (14 days): A special notice must be given to the company at least 14 days before the general meeting. The company forwards this notice to the auditor immediately.
Auditor's Representation: The outgoing auditor has the right to make written representations, which the company must circulate to shareholders before voting.
Special Resolution (75% majority): Shareholders pass a special resolution approving the removal. File Form MGT-14 with the ROC within 30 days. Government fee: ₹200 to ₹600.
File Form ADT-2: Apply to the Central Government for removal approval within 30 days of the special resolution. Government fee: ₹200 to ₹600.
Central Government Approval: The Central Government examines the application and grants or denies approval. Timeline: 30 to 60 days.
Appoint New Auditor: Once approved, appoint a new auditor at the next AGM (or within 60 days of Central Government approval).
File Form ADT-1: File ADT-1 within 15 days of the new appointment.
Removing an auditor requires Central Government approval via Form ADT-2. Without this approval, the removal is legally invalid. Simply not reappointing an auditor at the AGM (when their term ends) is not removal and does not require ADT-2 or a special resolution.
Auditor Rotation Rules for Listed Companies
Section 139(2) of the Companies Act, 2013 mandates auditor rotation for listed companies and prescribed classes of companies. Private limited companies are not subject to mandatory rotation, which is a significant distinction.
Parameter
Individual Auditor
Audit Firm
Maximum Term
1 term of 5 consecutive years
2 terms of 5 consecutive years (10 years)
Cooling-off Period
5 years before reappointment
5 years before reappointment
Applicable To
Listed companies, prescribed classes
Listed companies, prescribed classes
Private Limited Companies
No mandatory rotation
No mandatory rotation
Listed companies must check auditor rotation limits before reappointment. An individual CA can serve a maximum of 5 years, and an audit firm a maximum of 10 years, followed by a 5-year cooling-off period. Private limited companies face no such restriction and can reappoint the same auditor indefinitely.
2025 Amendment: New Rules for Auditor Filing
The Ministry of Corporate Affairs issued MCA Notification G.S.R. 359(E) dated 30 May 2025, introducing the Companies (Audit and Auditors) Amendment Rules, 2025. These rules took effect on 14 July 2025 and bring four significant changes to auditor filing requirements.
Key Changes in the 2025 Amendment
ADT-1 mandatory for first auditor: Previously, filing Form ADT-1 for the first auditor appointed by the Board within 30 days of incorporation was optional. Now it is mandatory. Companies incorporated after 14 July 2025 must file ADT-1 within 15 days of the Board appointing the first auditor.
ADT-4 electronic filing: Form ADT-4 (Report of Fraud by Auditor under Section 143(12)) must now be filed electronically through the MCA portal. Physical filing is no longer accepted.
Revised form formats: ADT-1, ADT-2, ADT-3, and ADT-4 have updated formats effective from 14 July 2025. Filings made on or after this date must use the revised forms on the MCA V3 portal.
Clauses (e) and (f) of Rule 13(2) omitted: This removes certain procedural requirements that were part of the earlier audit rules, simplifying the filing process for specific scenarios.
Effective 14 July 2025: ADT-1 filing is now mandatory for first auditor appointments. If your company was incorporated after this date, file ADT-1 within 15 days of the Board appointing the first auditor. Non-compliance attracts penalties up to 12x the normal fee.
Why Choose IncorpX for Auditor Change Filing
Based on our experience processing 3,500+ auditor change filings across India, we handle every scenario from standard resignations to complex Central Government removal applications. Here is what sets IncorpX apart. You can also get a compliance health check for your company's overall filing status.
Transparent Pricing
Starting at ₹2,999 with government fees charged at actuals. No hidden charges. We publish pricing upfront while most competitors use opaque contact forms.
Fast Processing
Standard auditor change in 3 to 5 working days. Even complex removal cases with Central Government approval handled within 30 to 60 days with regular follow-ups.
Expert CA/CS Team
Practising Chartered Accountants and Company Secretaries handle every filing. 3,500+ auditor change filings processed with zero rejection track record.
100% Online Process
Complete digital process with no office visits required. Documents shared electronically, DSC managed remotely, and MCA filing done from our end.
All Scenarios Covered
Resignation, removal, rotation, casual vacancy, and first auditor appointment. Every scenario handled with appropriate forms (ADT-1, ADT-2, ADT-3, MGT-14).
Post-Filing Support
Statutory register updates, compliance calendar reminders, and ongoing audit compliance support. We ensure your company stays on track after the auditor change.
Money-Back Guarantee
Full refund if filing is not completed as promised. Risk-free engagement with clear deliverables and timelines communicated before you pay.
Free Consultation
Talk to a CA/CS expert before engaging. No-obligation assessment of your auditor change requirements. We confirm the exact forms, timeline, and cost before you proceed.
Free consultation. No obligation. Starting at ₹2,999.
Frequently Asked Questions on Change of Auditor
Below are 38 frequently asked questions about change of auditor in a company, covering process, cost, penalties, forms, eligibility, and scenarios. These answers are based on the Companies Act, 2013, the 2025 Amendment Rules, and our experience processing 3,500+ auditor change filings.
Change of auditor is the statutory process of replacing a company's existing statutory auditor with a new Chartered Accountant or audit firm. Governed by Section 139 and Section 140 of the Companies Act, 2013, this process requires filing Form ADT-1 with the MCA within 15 days of appointing the new auditor. Government fees range from ₹200 to ₹600.
Section 139 of the Companies Act, 2013 governs appointment of auditors. It mandates the first auditor be appointed by the Board within 30 days of incorporation. Subsequent auditors are appointed at the AGM for a 5-year term (individual) or two consecutive 5-year terms (audit firm). The company files Form ADT-1 within 15 days of each appointment.
Section 140 covers removal, resignation, and special notice requirements for statutory auditors. Removal before term completion requires a special resolution by shareholders and Central Government approval via Form ADT-2. A resigning auditor must file Form ADT-3 within 30 days. Non-compliance attracts penalties up to ₹5,00,000.
A casual vacancy occurs when an auditor's position falls vacant before term completion due to resignation, death, or disqualification. If caused by resignation, the Board fills it and shareholders approve at an EGM within 3 months (Section 139(8)). For other causes, the Board appoints a replacement within 30 days. File ADT-1 within 15 days.
Under Section 141 of the Companies Act, 2013, these persons are disqualified: body corporates (except LLPs), officers or employees of the company, persons with business relationships with the company, persons owing more than ₹5 lakh to the company, persons convicted of fraud (10-year bar), and CAs holding audit appointments in more than 20 companies.
A statutory auditor is appointed at the AGM for a term from the conclusion of that AGM to the conclusion of the 6th consecutive AGM, effectively a 5-year term under Section 139(1). Listed companies face mandatory rotation: individual auditor max 5 years, audit firm max 10 years (two terms of 5 years), followed by a 5-year cooling-off period.
Yes, a statutory auditor can resign by submitting a written resignation letter to the company. The auditor must then file Form ADT-3 with the MCA within 30 days of resignation, stating reasons. Failure to file ADT-3 attracts a penalty of ₹50,000 to ₹5,00,000 on the auditor under Section 140(2) read with Section 140(3).
The Board of Directors must appoint the first auditor within 30 days of incorporation under Section 139(6). If the Board fails, shareholders appoint the auditor at an EGM within 90 days. Post the 2025 Amendment Rules (effective 14 July 2025), filing Form ADT-1 is now mandatory even for first auditor appointments, replacing the earlier exemption.
After the Companies (Amendment) Act, 2017, mandatory ratification of auditors at every AGM was removed. Once appointed for a 5-year term under Section 139(1), the auditor continues without annual shareholder ratification. However, the company's Articles of Association may still require it if not amended to reflect the 2017 change.
Under Section 139(2) of the Companies Act, 2013, after completing the maximum term, an auditor must observe a 5-year cooling-off period before reappointment to the same company. For individual auditors, this applies after 1 term of 5 years. For audit firms, it applies after 2 terms of 5 years (10 years total). This rule covers listed and prescribed companies.
Form ADT-1 is the MCA-prescribed form for filing Notice of Appointment of Auditor. Every company must file it within 15 days of appointing or reappointing a statutory auditor. Attachments include the board resolution, auditor consent letter, and Section 141 eligibility certificate. Government fee ranges from ₹200 to ₹600 based on nominal share capital.
Form ADT-2 is the application to the Central Government for removal of auditor before the expiry of their term. The company files it within 30 days of passing the special resolution for removal under Section 140(1). Government fee: ₹200 to ₹600. Central Government approval typically takes 30 to 60 days.
Form ADT-3 is the Notice of Resignation by Auditor filed by the resigning auditor (not the company) with the MCA within 30 days of resignation. It must include the reason for resignation and any relevant facts. Penalty for non-filing: ₹50,000 to ₹5,00,000 on the auditor. Post the 2025 amendment, the form has a revised format.
Non-appointment of an auditor violates Section 139 of the Companies Act, 2013. The company faces a penalty of ₹25,000 to ₹5,00,000. Every defaulting officer (director) faces ₹10,000 to ₹1,00,000 penalty. Additionally, the Registrar of Companies may issue a show-cause notice, and the company cannot hold a valid AGM without a statutory auditor.
To change a company's auditor: (1) Pass a board resolution noting the reason for change. (2) Obtain consent and Section 141 eligibility certificate from the new auditor. (3) Pass a shareholder resolution at AGM (ordinary) or EGM (casual vacancy). (4) File Form ADT-1 on the MCA portal within 15 days. Total timeline: 3 to 10 working days.
Log in to the MCA V3 portal at www.mca.gov.in. Navigate to MCA Services > Company e-filing > ADT-1. Enter the company CIN, new auditor's ICAI details, and appointment date. Upload attachments: board resolution, consent letter, and eligibility certificate. Pay the ₹200 to ₹600 fee and sign with the director's DSC.
Removing an auditor before term completion requires: (1) Board resolution recommending removal. (2)Special resolution by shareholders (75% majority). (3) File Form ADT-2 with the Central Government within 30 days. (4) Obtain Central Government approval (30 to 60 days). (5) Appoint new auditor and file Form ADT-1.
After auditor resignation: (1) Resigning auditor files Form ADT-3 with MCA within 30 days. (2) Board fills the casual vacancy by appointing a new auditor within 30 days. (3) Shareholders approve at EGM within 3 months (Section 139(8)). (4) Company files Form ADT-1 within 15 days of appointment. Timeline: 5 to 7 working days.
At the AGM, the outgoing auditor's term concludes. (1) Board recommends a new auditor before the AGM. (2) Shareholders pass an ordinary resolution appointing the new auditor for a 5-year term. (3) New auditor provides consent and Section 141 certificate. (4) Company files Form ADT-1 within 15 days of AGM. Government fee: ₹200 to ₹600.
Key documents: (1) Board resolution approving auditor change. (2) New auditor's written consent letter. (3)Section 141 eligibility certificate from new auditor. (4) ICAI membership and Certificate of Practice details. (5) Director's DSC for MCA filing. (6) Outgoing auditor's resignation letter (if applicable). (7) Special resolution and Form MGT-14 (if removal).
Standard auditor change (resignation or term completion) takes 3 to 5 working days from document collection to ADT-1 approval. Casual vacancy appointment takes 5 to 7 working days including Board resolution and EGM scheduling. Removal of auditor before term completion takes 30 to 60 days due to Central Government approval via Form ADT-2.
Under Section 140(1), removing an auditor before term expiry requires a special resolution passed by shareholders with at least 75% majority. The resolution must be filed with the ROC in Form MGT-14 within 30 days. A special notice of 14 days must be given to the company, which forwards it to the auditor. Government fee for MGT-14: ₹200 to ₹600.
Government fee for ADT-1 is based on nominal share capital: Below ₹1 lakh: ₹200; ₹1 lakh to ₹5 lakh: ₹300; ₹5 lakh to ₹25 lakh: ₹400; ₹25 lakh to ₹1 crore: ₹500; ₹1 crore and above: ₹600. This fee applies per filing. Additional fees apply for ADT-2 or MGT-14 if removal is involved.
Total cost depends on the scenario. Standard change (resignation/term end): IncorpX professional fee ₹2,999 + government fee ₹200 to ₹600 = total ₹3,199 to ₹3,599. Removal scenario: additional ADT-2 + MGT-14 government fees, totalling ₹4,000 to ₹6,000+. DSC renewal (if needed): ₹1,500 to ₹2,500 extra.
Late filing penalties for ADT-1 are calculated as multiples of the normal fee: Up to 30 days late: 2x; 31 to 60 days: 4x; 61 to 90 days: 6x; 91 to 180 days: 10x; beyond 180 days: 12x the normal fee. For a ₹300 normal fee, the maximum penalty reaches ₹3,600. Filing within 15 days of appointment avoids all penalties.
IncorpX's auditor change filing starts at ₹2,999, covering ADT-1 filing, board resolution drafting, consent letter coordination, and complete MCA e-filing. Government fee (₹200 to ₹600) is charged at actuals. Complex cases involving removal (ADT-2 + MGT-14 filings) or Central Government approval are quoted separately. Free consultation available before engagement.
Under Section 139(10) of the Companies Act, 2013, failure to appoint a statutory auditor attracts: company penalty of ₹25,000 to ₹5,00,000; every defaulting officer (director) faces ₹10,000 to ₹1,00,000. The Registrar may also initiate prosecution. Financial statements audited by an unqualified or non-appointed auditor face rejection.
Yes, 18% GST applies on professional service fees charged by CAs, CSs, and service providers like IncorpX for auditor change filing. On IncorpX's base fee of ₹2,999, GST of ₹540 applies, making the total ₹3,539 plus government fees. Government fees paid to MCA are exempt from GST.
Form ADT-2 government fee follows the same share capital slab as ADT-1: ₹200 to ₹600. Additionally, the special resolution must be filed via Form MGT-14 at ₹200 to ₹600. Total government fees for the removal process: ₹600 to ₹1,800 (ADT-2 + MGT-14 + ADT-1 for new auditor). Professional fees are quoted separately.
Yes, the entire auditor change process is 100% online. Form ADT-1 is filed electronically on the MCA V3 portal at www.mca.gov.in. IncorpX handles the complete online process including document preparation, MCA portal filing, and DSC management. Clients share documents digitally; no physical paperwork or office visits required. Turnaround: 3 to 5 working days.
ADT-1: Notice of Appointment of Auditor, filed by the company within 15 days of appointment. ADT-2: Application for removal of auditor before term, filed by the company within 30 days of special resolution to Central Government. ADT-3: Notice of Resignation, filed by the auditor within 30 days of resignation.
Resignation is voluntary: the auditor initiates it, files Form ADT-3 within 30 days, and the company fills the casual vacancy. Removal is company-initiated: requires a special resolution (75% majority), Central Government approval via Form ADT-2, and takes 30 to 60 days. Resignation is simpler; removal involves regulatory oversight under Section 140(1).
For unlisted private companies, yes, the same auditor can be reappointed for consecutive 5-year terms at the AGM with no rotation restriction. For listed companies and prescribed classes, no: an individual auditor cannot be reappointed after 5 years and a firm after 10 years. A 5-year cooling-off period applies before reappointment under Section 139(2).
First auditor: appointed by the Board within 30 days of incorporation (Section 139(6)); term until the first AGM. Subsequent auditor: appointed by shareholders at the AGM for a 5-year term (Section 139(1)). Post the 2025 Amendment, ADT-1 is now mandatory for both. First auditor appointment does not require shareholder approval unless the Board fails to act within 30 days.
Private limited companies face no mandatory rotation; the same auditor can serve indefinitely if reappointed at each AGM. Listed companies must rotate auditors: individual CA max 5 years, audit firm max 10 years, followed by 5-year cooling-off (Section 139(2)). Listed companies also have additional SEBI disclosure requirements and the Audit Committee recommends the appointment.
Only a practising Chartered Accountant holding a valid Certificate of Practice from the Institute of Chartered Accountants of India (ICAI) can be appointed as statutory auditor. An audit firm (partnership of CAs) is also eligible. The auditor must not hold appointments in more than 20 companies and must meet all eligibility criteria under Section 141.
A company cannot unilaterally change its auditor mid-term. If the auditor voluntarily resigns, the company fills the casual vacancy through Board appointment. Without resignation, the company must follow the formal removal process under Section 140(1): special resolution, Central Government approval via Form ADT-2, and then appoint a replacement. There is no shortcut.
For listed companies and prescribed classes, the Audit Committee (constituted under Section 177) recommends the auditor to the Board. The committee evaluates the proposed auditor's qualifications, independence, and audit capacity. For private limited companies with paid-up capital below ₹50 crore and turnover below ₹200 crore, an Audit Committee is not mandatory.
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