Auditor Resignation, Compliance & Filing of ADT-3 form

Form ADT-3 is to be filed for resignation by auditor from the company as an auditor within 30 days of resignation.

E Form ADT-3 is required to be filed pursuant to Section 140(2) of the Companies Act, 2013 and Rule 8 of the Companies (Audit and Auditors) Rules, 2014 which are reproduced for your reference.

Section 140:

(2) The auditor who has resigned from the company shall file within a period of thirty days from the date of resignation, a statement in the prescribed form with the company and the Registrar, and in case of companies referred to in sub-section (5) of section 139, the auditor shall also file such statement with the Comptroller and Auditor-General of India, indicating the reasons and other facts as may be relevant with regard to his resignation.

Rule 8:

Resignation of auditor —For the purposes of sub-section (2) of section 140, when an auditor has resigned from the company, he shall file a statement in Form ADT-3.

Purpose of the eForm

Auditor resigning from the company shall file within 30 days from the date of resignation, a statement in Form ADT-3 with the registrar. This E-Form has been introduced in the Companies Act 2013.

Penal provisions

As per Section 140(3), If the auditor does not comply with sub-section (2), he or it shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

Therefore, if the auditor fails to inform the ROC about the resignation then there may be penalty of Rs. 50,000/- to 5 lacs.

The auditor has to state the following in the E-form ADT-3:

• The date of resignation will be the date written in the resignation letter.
• The auditor has to state the exact reasons for resigning. These are written in the resignation letter as well as the form ADT-3.
• Other facts relevant to resignation can be anything which is necessary for the company as well as the ROC to know with regard to the resignation.
• Since this form is a declaration by the auditor, therefore has to be signed by the auditor only.

Sequence of events for Resignation of Existing Auditor and appointment of New auditor will be as follows:

For the Company

1) Receive the Resignation Letter alongwith Form ADT-3 from the resigning Auditor.
2) Call a Board Meeting for acceptance of the resignation.
3) Call a Board Meeting for filing the Casual Vacancy and approve the notice for EGM.
4) Hold the EGM and approve the Auditor’s Appointment.
5) Now file Form No.MGT-14 for the filing of the Resolution passed at EGM
6) File ADT-1 for new Auditor’s Appointment.

For Resigning Auditor

• File ADT-3 alongwith resignation letter with company.
• File ADT-3 alongwith resignation letter and reasons for resignation with ROC.
  

The 30 days time for filing ADT-3 with the ROC starts from the date of resignation i.e the date written in the resignation letter.

The fee for filing ADT-3 depends on the nominal share capital of the Company:

Nominal share Capital in Rs.	Fee for ADT-3
Less than Rs. 1,00,000/-	200/-
1,00,000/- to Rs. 4,99,999/-	300/-
5,00,000/- to 24,99,999/-	400/-
25,00,000/- to 99,99,999/-	500/-
1,00,00,000 & above	600/-

 In case of delay Additional fees will be levied as follows:

Period of Delay	Additional fee
Delay upto 30 days	2 times of normal fees
30-60 days	4 times of normal fees
60-90 days	6 times of normal fees
90-180 days	10 times of normal fees
Above 180 days delay	12 times of normal fees

Hope you find the above information in order.