ADT-1 Filing

ADT-1 Filing (Appointment of Auditor)

Form ADT-1 is a mandatory filing required under the Companies Act, 2013 for the appointment of an auditor for a company. This form is used to notify the Registrar of Companies (RoC) about the appointment of the company’s auditor. It is essential for maintaining the company’s compliance and ensuring that a certified auditor is in place to audit the financial statements.

Purpose of ADT-1 Filing:

The primary purpose of filing ADT-1 is to:

1. Notify the RoC: The form officially notifies the Registrar of Companies (RoC) about the appointment or reappointment of an auditor.
2. Statutory Requirement: It ensures that the company meets the statutory obligations regarding auditor appointment.
3. Ensure Legal Compliance: It aligns the company with the Companies Act, 2013, preventing any legal consequences for non-compliance.
4. Audit Transparency: The filing helps in keeping the financial audit process transparent and well-documented for the shareholders and regulatory bodies.

Who is Required to File ADT-1?

• Company’s Board of Directors:
  • First Auditor: The company’s board of directors must file ADT-1 for the first auditor appointed within 30 days from the date of incorporation of the company.
  • Subsequent Auditors: Following the first appointment, the board must file ADT-1 to notify RoC about the reappointment or appointment of auditors after each Annual General Meeting (AGM).
• Company Secretary (in some cases): A Company Secretary may file the form on behalf of the company, provided they have the necessary authorization.

Benefits of ADT-1 Filing:

1. Legal Compliance:
   • ADT-1 filing ensures that the company complies with legal requirements, avoiding penalties, and ensuring the validity of its financial audit.
2. Transparency in Operations:
   • Filing ADT-1 helps maintain transparency in the appointment of auditors, allowing stakeholders to verify that the company’s financial audits are being carried out by authorized auditors.
3. Credibility:
   • Timely filing and proper auditor appointment enhance the company’s credibility and foster trust among shareholders, investors, and regulators.
4. Audit Continuity:
   • Ensures the continuity of audit practices, which is essential for financial transparency and the integrity of the company’s operations.

When is ADT-1 Filing Required?

• For First Appointment:
  • The first auditor is appointed by the board of directors of the company within 30 days of incorporation.
  • Once appointed, the board must file ADT-1 with the Registrar of Companies (RoC) to officially inform the authorities.
• For Subsequent Appointments:
  • After the Annual General Meeting (AGM), where the shareholders approve the auditor’s reappointment or a new appointment, the company has 15 days to file ADT-1 to notify the RoC.
  • The annual reappointment of the auditor is made during the AGM, and it is mandatory to update the RoC with this appointment.

Process for Filing ADT-1:

1. Pass a Board Resolution:
   • The first step is for the board of directors to pass a Board Resolution approving the appointment of the auditor. This resolution is necessary to document the decision before filing.
2. Pass a Special Resolution in AGM:
   • For subsequent appointments, the appointment or reappointment of the auditor must be approved by the shareholders at the Annual General Meeting (AGM). The company should pass a special resolution for the appointment.
3. Obtain Auditor’s Consent:
   • The company must obtain written consent from the auditor being appointed. This ensures that the auditor agrees to take on the responsibility for auditing the company’s accounts.
4. Prepare the ADT-1 Form:
   • The company must fill out Form ADT-1 on the MCA portal. The form requires details about the company, auditor’s name, firm name, the auditor’s membership number, and other key details.
   • It also includes information about the auditor’s tenure and the remuneration.
5. File ADT-1 with RoC:
   • After filling in the necessary details in ADT-1, the form must be submitted to the Registrar of Companies (RoC) online through the MCA portal.
   • The form must be filed within 30 days of the first auditor’s appointment or 15 days from the AGM for subsequent appointments.
6. Payment of Fees:
   • Filing ADT-1 involves a payment of prescribed filing fees. The amount depends on the company’s authorized capital.
7. Acknowledgment from RoC:
   • Once the form is successfully filed and processed, the RoC will acknowledge the submission of ADT-1. The filing is now complete, and the company can proceed with its auditing process.

Documents Required for ADT-1 Filing:

1. Board Resolution:
   • A copy of the board resolution for appointing the auditor or for the reappointment after AGM.
2. Special Resolution:
   • A copy of the special resolution passed by shareholders during the AGM for the auditor’s appointment.
3. Consent from Auditor:
   • Written consent from the auditor confirming their willingness to act as the auditor of the company.
4. Other Supporting Documents:
   • Any additional documents required by the Registrar of Companies (RoC) for validation or verification purposes.

Penalties for Non-Compliance with ADT-1 Filing:

1. Late Filing Fees:
   • If the ADT-1 form is filed after the due date, the company may incur additional fees. The late filing fee depends on the company’s authorized capital and the delay period.
2. Legal Implications:
   • Non-filing or delayed filing of ADT-1 can result in the auditor’s appointment not being recognized, which could affect the validity of the company’s audit report. The company may also face penalties or fines from the Registrar of Companies (RoC).
3. Striking Off the Company:
   • Continuous non-compliance with statutory filing requirements, including ADT-1, may lead to the striking off of the company from the Registrar of Companies (RoC).
4. Ineligibility for Audit Reports:
   • Without a valid appointment of auditors, the company will be unable to have its financial statements audited, which is a legal requirement under the Companies Act, 2013.