Friday, January 2, 2015


The Companies Act 2013 has introduced many changes including Change in Auditor, appointment, re-appointment and information of the same with MCA. Earlier Auditor was filing 23B for appointment or re-appointment of the auditor, now burden of intimation to the MCA is shifted from Auditor to Companies. Every Company has to file ADT-1 within 15 days of the appointment of the auditor. MCA has introduced New Forms in their rules for Change in Auditor / Auditors :
- ADT-1 Appointment of Auditor within 15 Days of appointment / reappointment.
-  ADT – 2  Application to Central Government for removal of Auditor
- ADT-3 Resignation of Auditor to be filed by the Auditor within 30days of the resignation.  As per Rule 8 the Auditor has to inform MCA in ADT -3 giving reason for resignation and other facts relevant to the resignation. If the auditor does not file the ADT-3 and there is a fine of  Rs. 50000 to Rs. 500000/-

- ADT-4 Information by the Auditor to Central Government about fraudulent activities of the company.
  Section 139 and 140 read with Rule3 to Rule 8 provide for appointment, reappointment and removal of the auditor as per Companies Act 2013
·         Section 139(1)  -  General Provisions for appointment of Auditor.
·         Section 139(2)  - Listed & Specified Companies - No listed company and a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint
a)      an individual as auditor for more than one term of five consecutive years       and
b)      an audit firm as auditor for more than two terms of five consecutive years:
·         Sec 139(3)- Rotation of Auditor
·         Sec 139(4)- Manner of Rotation of Auditors Appointed u/s 139(2)
·         Sec 139(5) Appointment of Auditor- In case of Companies owned or controlled by Govt.
·         Sec 139(6) Appointment of First Auditors by BOD
·         Sec 139(7) Appointment of First Auditor In case of Companies owned or controlled by Govt.
·         Sec 139(8)Casual Vacancy
·         Sec 139(9) Reappointment of Auditor
·         Sec 139(10) Suo Motu Appointment of Existing Auditor
·         Sec 139(11) Appointment of Auditor by Audit Committee 
·         Sec 140(1) Removal of Auditor before the Expiry of his Term
·         Sec 140(2) Intimation of the resignation to the Registrar by the Auditor
·         Sec 140(3) Penalty for Non- Filing of Form by Auditor
·         Sec 140(4) Special Notice
·         Sec 140(5) Removal of Auditor by Tribunal

Also Given

DRAFT FOR NOTICE OF EXTRAORDINARY GENERAL MEETING  SPECIAL BUSINESS -  Appointment of Statutory Auditors to fill casual vacancy
Explanatory Statement under Section 102(1) of the Companies Act, 2013.
ADT-1, ADT-2, ADT-3 and ADT-4

Contributed by

Ms. Pooja Aggarwal
CA Finalist
Article Assistant
Sandeep Ahuja & Co.
Delhi Office