Can a company change its auditor before 5 years?

Yes — through Central Government approval, auditor resignation, or disqualification. The practical route is non-reappointment when the 5-year term expires.

Auditor Appointment Services – ADT-1 Filing Under Companies Act 2013 | NDS Avla

Auditor Appointment Services – ADT-1 Filing Under Section 139

Q: Is ADT-1 required every year?

ADT-1 is required at first appointment and at the start of each fresh 5-year term or when the auditor changes. Annual AGM ratification within an existing 5-year term does not require a fresh ADT-1 under current MCA rules.

Q: What disqualifies someone from being a statutory auditor?

Not being a practising CA, being a body corporate, being an officer/employee of the company, being indebted to the company for over ₹5 lakh, or having a conflicting business relationship.

Statutory Auditor Appointment for Companies — First Auditor, AGM Appointment, and ADT-1 Filing With the ROC Within 15 Days

Every company incorporated in India is required to appoint a statutory auditor — a practising Chartered Accountant or a CA firm — to audit its annual financial statements under Section 139 of the Companies Act 2013. The appointment must be made within 30 days of incorporation (first auditor, appointed by the Board) or at the Annual General Meeting (subsequent auditor, appointed by shareholders). After every auditor appointment or re-appointment, Form ADT-1 must be filed with the ROC within 15 days — informing the MCA of who has been appointed as the company's statutory auditor.

The auditor appointment process involves more than just selecting a CA — it requires obtaining the auditor's written consent and eligibility certificate, ensuring the auditor is not disqualified under Section 141, passing the requisite board or shareholder resolution, and filing ADT-1 within the strict 15-day window. Our team manages the complete auditor appointment compliance cycle — from auditor selection guidance to ADT-1 e-filing on MCA21.

Our Auditor Appointment Services

First Auditor Appointment (Board)

Appointment of the first statutory auditor by the Board within 30 days of incorporation — obtaining the auditor's consent and eligibility certificate, passing the Board Resolution, and filing ADT-1 within 15 days of appointment.

Subsequent AGM Appointment

Appointment or ratification of the statutory auditor at each AGM for the five-year term under Section 139(1) — Ordinary Resolution drafting, shareholder meeting compliance, and ADT-1 filing within 15 days of AGM.

Eligibility & Independence Check

Verifying that the proposed auditor satisfies Section 141 eligibility — membership of ICAI, certificate of practice, absence of disqualifying relationships with the company (shareholding, directorship, indebtedness), and no conflicts with independence requirements.

Auditor's Consent & Certificate

Obtaining the auditor's written consent (under Section 139(1)) confirming their willingness to be appointed, and the eligibility certificate confirming they are not disqualified — both required as ADT-1 attachments.

ADT-1 E-Filing

Preparing and filing Form ADT-1 on the MCA21 portal within 15 days of the Board or shareholder appointment — with consent letter, eligibility certificate, and resolution as mandatory attachments.

Casual Vacancy Appointment

Where an auditor resigns mid-term or vacates office, managing the Board's appointment of a replacement auditor for the remainder of the term — with separate ADT-1 filing and compliance with Section 139(8) casual vacancy rules.

Auditor Appointment — Key Requirements

Particulars	First Auditor	Subsequent Auditor
Appointed By	Board of Directors	Shareholders at AGM
Deadline for Appointment	Within 30 days of incorporation	At the first AGM; ratified at each subsequent AGM
ADT-1 Filing Deadline	Within 15 days of Board appointment	Within 15 days of AGM
Tenure	Until conclusion of first AGM	5 years (Section 139(1)); rotation applies for listed / large companies
Required Documents	Board Resolution, auditor consent, eligibility certificate	Shareholder Resolution, auditor consent, eligibility certificate
Late Fee for ADT-1	₹100 per day from day 16	₹100 per day from day 16

⚠️ If the Board does not appoint the first auditor within 30 days of incorporation, the right to appoint passes to the shareholders at an Extraordinary General Meeting. Failure to make any appointment within 90 days is a default attracting penalties on the company and its officers.

Frequently Asked Questions

Is ADT-1 required every year or only at initial appointment?

Under the current MCA rules, ADT-1 is required to be filed: at the time of first appointment (within 15 days of the Board appointment); at the AGM where a new auditor is appointed or the existing five-year tenure is ratified at the beginning of the term; and whenever there is a change in auditor (new appointment following rotation or resignation). The MCA amended the ADT-1 rules in 2018 — under current rules, annual ratification at each AGM does not require a fresh ADT-1 if the same auditor continues within their existing five-year term. ADT-1 is needed at the start of each fresh term or whenever the auditor changes.

Can a company change its auditor before the 5-year term ends?

Yes, but only in specific circumstances. An auditor can be removed before the end of the five-year term: (a) if the Central Government grants approval on an application by the company; (b) if the auditor resigns; or (c) if the auditor is disqualified under Section 141. Simple dissatisfaction with the auditor is not sufficient — the Central Government approval route is cumbersome. The more practical route for companies is to not re-appoint the existing auditor when the five-year term expires, and to appoint a new auditor for the next five-year term through the normal AGM process.

What disqualifications prevent someone from being appointed as statutory auditor?

Section 141 of the Companies Act lists the following disqualifications: not being a practising Chartered Accountant; being a body corporate (firms and LLPs of CAs are permitted); being an officer or employee of the company; being a partner or employee of an officer or employee of the company; being indebted to the company or its subsidiary for more than ₹5 lakh; having a guarantee or security given by the auditor for more than ₹1 lakh on behalf of any third person to the company; and any business relationship with the company (direct or indirect). The CA firm must also confirm that its appointment will not exceed the auditor ceiling limit under Section 141(3)(g).

Appointing Your Company's Statutory Auditor? We File ADT-1 on Time.

Our Company Secretarial team manages auditor eligibility checks, consent and certificate procurement, Board/AGM resolution drafting, and ADT-1 e-filing within the 15-day deadline.

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