Auditor Resignation (Form ADT-3)
When a statutory auditor resigns, the auditor must file Form ADT-3 with the company and the Registrar within 30 days, stating the reasons. The company then has 30 days to fill the casual vacancy. We handle both sides on the MCA V3 portal, plus removal of an auditor before the term ends.
What it is
An auditor appointed for five years can step down before the term ends. The law lets them go, but asks for a paper trail. The resigning auditor files a statement, Form ADT-3, telling the company and the Registrar of Companies (ROC) why they are leaving and any other relevant facts.
The rule is Section 140(2) of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014. ADT-3 is filed on the MCA V3 portal by the auditor, with the auditor’s own DSC. A revised ADT-3 applies from 14 July 2025 under G.S.R. 359(E). For a government company, the statement also goes to the Comptroller and Auditor-General of India.
Who it applies to
You are the auditor stepping down
An individual CA or audit firm leaving a company mid-term must file ADT-3 within 30 days of the resignation. This duty is the auditor’s own.
Your company has lost its auditor
The resignation creates a casual vacancy. The board must appoint a new auditor within 30 days, with shareholders approving within three months.
You want the auditor out early
If the company wants to remove the auditor before the term ends, a different route applies: Central Government approval through ADT-2, then a special resolution.
Why it matters
Puts the reasons on record
ADT-3 states why the auditor left, and it sits on the company’s MCA record. Keep the reason accurate and complete.
Keeps the audit moving
AOC-4 still needs an audit report. A quick casual-vacancy appointment keeps your annual ROC filings on schedule.
Shields the auditor from penalties
Under Section 140(3), an auditor who skips ADT-3 faces a penalty of ₹50,000 or the audit fee, whichever is less, plus ₹500 a day, capped at ₹2 lakh.
Documents required
For ADT-3 (from the auditor)
- Resignation letter addressed to the company, with the date
- Reasons for resigning and any other relevant facts
- Auditor’s membership or firm registration number
- Auditor’s valid digital signature certificate (DSC)
For the new auditor (from the company)
- Board resolution appointing the new auditor
- New auditor’s written consent and Section 141 eligibility certificate
- Notice and resolution for the general meeting approving the appointment
For removal before term
- Board resolution proposing removal, with grounds
- Proof the auditor was given a chance to be heard
- Central Government approval order on ADT-2
- Special resolution of members
Resignation vs removal at a glance
| Auditor resigns | Company removes the auditor | |
|---|---|---|
| Who starts it | The auditor | The board |
| Approval needed | None for the resignation itself | Prior Central Government approval, then a special resolution |
| Form | ADT-3, by the auditor | ADT-2, by the company, within 30 days of the board resolution |
| Hearing | Not needed | The auditor must get a reasonable opportunity to be heard |
| Replacement | Board fills the casual vacancy within 30 days; members approve within three months | Members appoint the new auditor, usually at the same meeting |
Here is the catch: picture a Faridabad engineering company whose auditor takes up a full-time job in August. The auditor files ADT-3, but the board still has only 30 days to find a replacement, and the AGM is weeks away. Plan the handover before the letter arrives and the year’s audit is safe.
Removal is a heavier process on purpose: it protects the auditor’s independence. The company’s general meeting must be held within 60 days of the Central Government’s approval, and the special resolution is then filed in MGT-14 within 30 days. The power to approve is exercised by the Regional Director.
Often there is a simpler way. Say the promoters and the auditor have fallen out over fees. If the term is ending anyway, the company can propose a new auditor at the AGM with a special notice under Section 140(4). No ADT-2 is needed.
How it works
Hand in a dated resignation letter
The auditor writes to the board, giving the date and the reasons. The company acknowledges receipt in writing.
File ADT-3 within 30 days
The auditor files ADT-3 on the MCA V3 portal with the reasons and relevant facts, signed with the auditor’s DSC. We prepare the form for the auditor’s review.
Appoint the new auditor by board resolution
The board appoints a replacement within 30 days of the vacancy, after collecting the new auditor’s consent and eligibility certificate.
File ADT-1 and call the general meeting
We file Form ADT-1 for the new auditor within 15 days, and members approve the appointment at a general meeting within three months.
Hand over the audit file
The incoming auditor picks up from where the outgoing one stopped, so the year’s audit report is signed on time. In practice, we also check that the books are closed and reconciled, through our compliance and accounting support where needed, so the new auditor starts clean.
Timelines
File ADT-3 within 30 days
The resigning auditor files ADT-3 within 30 days from the date of resignation.
Appoint the new auditor within 30 days
The board fills the casual vacancy within 30 days. Members must approve it at a general meeting within three months, and the new auditor holds office until the next AGM.
For removal, apply in 30 days and meet within 60
ADT-2 goes to the Central Government within 30 days of the board resolution. After approval, the general meeting must be held within 60 days.
What happens if the filings are missed
The auditor pays up to ₹2 lakh
Under Section 140(3): ₹50,000 or an amount equal to the auditor’s remuneration, whichever is less, plus ₹500 for each day the failure continues, up to ₹2 lakh.
The company faces Section 147 fines
If the company does not fill the vacancy as Section 139 requires, Section 147(1) allows a fine of ₹25,000 to ₹5 lakh on the company and ₹10,000 to ₹1 lakh on each officer in default.
Your audit and AOC-4 stall
Without a validly appointed auditor, there is no audit report, and the company’s financial statements cannot be filed.
Frequently asked questions
Who files Form ADT-3, the auditor or the company?
The auditor files ADT-3. Section 140(2) puts the duty on the resigning auditor, who files the statement with both the company and the Registrar within 30 days of resigning. It is signed with the auditor’s own DSC. The company does not file ADT-3; its job is to fill the casual vacancy and file ADT-1 for the new auditor. We can prepare ADT-3 for the outgoing auditor to review and sign.
What is the deadline for filing ADT-3?
Thirty days from the date of resignation. The statement must give the reasons for resigning and any other facts relevant to the resignation. If the auditor misses the deadline, Section 140(3) allows a penalty of ₹50,000 or the auditor’s remuneration, whichever is less, plus ₹500 a day, up to ₹2 lakh. File in the first week and delay never comes up.
What reasons can an auditor give for resigning?
Any genuine reason, stated plainly, such as ineligibility arising under Section 141 or difficulty getting information needed for the audit. Section 140(2) asks for the reasons and other relevant facts, so vague one-liners are a poor idea. The revised ADT-3, in force from 14 July 2025, asks for this detail directly. A clear, factual reason protects both the auditor and the company.
How soon must the company appoint a new auditor?
Within 30 days of the vacancy. Under Section 139(8), the board fills a casual vacancy caused by resignation, and members must approve the appointment at a general meeting within three months of the board’s recommendation. The new auditor holds office until the next AGM. ADT-1 is filed within 15 days of the appointment. Line up the new auditor before the old one leaves and the gap closes in days.
Can a company remove its auditor before the five-year term ends?
Yes, but only with Central Government approval and a special resolution. Under Section 140(1), the company applies in Form ADT-2 within 30 days of the board resolution. The auditor must be given a reasonable opportunity to be heard. After approval, members pass a special resolution at a general meeting held within 60 days, and the company files MGT-14. We draft every step so the application is complete the first time.
Is there an easier way to change auditors than removal?
Yes, wait for the term to end or ask the auditor to resign. At the AGM where the term ends, members can appoint a new auditor; Section 140(4) requires a special notice where someone other than the retiring auditor is proposed. No ADT-2 or government approval is needed. If the auditor agrees to resign, ADT-3 and a casual-vacancy appointment do the job. Both routes are far quicker than removal.
What does the company file after the auditor resigns?
The company files Form ADT-1 for the new auditor within 15 days of the board meeting that fills the vacancy. It also holds a general meeting within three months to approve that appointment. The company does not file ADT-3 itself. Keep the resignation letter and the acknowledgement in your records, because the dates matter for every deadline that follows. With those papers in hand, the filings are routine.
Can the NCLT remove an auditor?
Yes. Under Section 140(5), the National Company Law Tribunal can order a change of auditor if satisfied that the auditor acted fraudulently or abetted or colluded in fraud. An auditor removed this way cannot be appointed as auditor of any company for five years and may face action under Section 447. It is rare. Most changes of auditor happen through resignation or at the end of a term.
Does the resigning auditor still have to sign this year’s audit report?
Usually not. Once the resignation takes effect, the new auditor appointed to the casual vacancy completes the audit. That is why the 30-day board appointment matters so much in practice. For a company with a 30 September AGM, an auditor leaving in July leaves very little time. Appoint the replacement quickly and the audit report still arrives before the AGM.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
For the replacement auditor, the government fee for ADT-1 runs from ₹200 (authorised capital below ₹1 lakh) to ₹600 (₹1 crore and above). A late ADT-1 is charged at 2× to 12× the normal fee, depending on the delay.
Ready to begin?
Tell us who is leaving, when, and why, and we will line up ADT-3, the new appointment and ADT-1 inside the deadlines.