What is Form ADT-1?

Form ADT-1 is an official electronic form filed with the Registrar of Companies (ROC) to notify the appointment of a statutory auditor for a company. It is a mandatory compliance under the Companies Act, 2013, designed to keep the Ministry of Corporate Affairs (MCA) updated about auditor appointments.

Key Details Required in Form ADT-1 Filing:

• Category of Auditor: Individual or Firm

• Income Tax PAN: Unique identifier for the auditor

• Membership/Firm Registration Number: Verification with ICAI

• Address and Email ID: For official communication

• Period of Appointment: Financial years covered by the audit

• Date of Appointment Resolution: Date of Board Meeting or AGM approving the appointment

Legal Framework Governing ADT-1

• Section 139(1), Companies Act, 2013: Rules for appointment and rotation of auditors.

• Companies (Audit and Auditors) Rules, 2014: Procedures and mandatory use of Form ADT-1 for auditor notification.

Appointment vs. Filing Form ADT-1

• Appointment: Internal company decision through resolution.

• Form ADT-1: External notification to MCA registering the auditor appointment.

Who Appoints the First Auditor?

• The Board of Directors appoints the first auditor within 30 days of incorporation.

• If the Board fails, shareholders appoint within the next 60 days via an Extraordinary General Meeting (EGM).

• Form ADT-1 must be filed within 15 days of this appointment.

Is Filing ADT-1 Mandatory?

Yes, filing ADT-1 is compulsory for every auditor appointment, including the first auditor. Failure to file invites penalties ranging from ₹25,000 to ₹5,00,000.

Subsequent Auditor Appointment

• Appointed by shareholders during the Annual General Meeting (AGM) for a 5-year term.

• Auditor rotation rules apply to certain companies to ensure independence.

• Filing of ADT-1 within 15 days of appointment/reappointment at AGM is mandatory.

Benefits of Filing Form ADT-1

• Avoids legal penalties and fines

• Ensures official notification to ROC and MCA compliance

• Enhances company credibility and transparency

• Supports good corporate governance and investor confidence

Who Must File ADT-1?

All companies except LLPs, including:

• Private and Public Limited Companies

• One Person Companies (OPCs)

• Small and Dormant Companies

• Listed and Unlisted Companies

Documents Required for Filing ADT-1

• Auditor’s Consent Letter

• Eligibility Certificate (Section 141 compliance)

• Board or AGM Resolution approving appointment

• Formal Appointment Letter (recommended)

• Digital Signatures of Director and Practicing Professional (CA, CS, CMA)

Step-by-Step Filing Process

1. Hold Board Meeting or AGM to approve auditor appointment.

2. Obtain consent and eligibility certificate from the auditor.

3. Download and fill Form ADT-1 on MCA portal.

4. Attach required documents and digitally sign.

5. Submit form and pay filing fees.

6. Receive acknowledgment (SRN) as proof of filing.

Timeline, Due Date & Validity of Form ADT-1

Form ADT-1 is used to notify the Ministry of Corporate Affairs (MCA) about the appointment of a statutory auditor under the Companies Act, 2013. Timely filing is mandatory, and the form’s validity corresponds to the auditor’s appointment period.

1. Due Date for Filing Form ADT-1

The deadline depends on the type of auditor being appointed:

a) Appointment of First Auditor

• The Board of Directors must appoint the first auditor within 30 days of company incorporation (Section 139(6), Companies Act, 2013).

• Filing Form ADT-1 is mandatory and recommended for documentation and transparency.

• The form must be filed within 15 days from the date of the Board Meeting where the appointment was made.

b) Appointment of Subsequent Auditor

• Auditors appointed or reappointed at the Annual General Meeting (AGM) require mandatory ADT-1 filing.

• The form must be submitted within 15 days from the date of the AGM approving the auditor’s appointment or reappointment.

Example:
If the AGM is held on 25th September, the last date to file Form ADT-1 would be 10th October.

2. Validity of Form ADT-1

The validity of a filed ADT-1 is tied to the auditor’s appointment term:

a) First Auditor

• The ADT-1 validity extends until the conclusion of the company’s first Annual General Meeting.

b) Subsequent Auditors

• Auditors can be appointed for a maximum term of five consecutive years (Section 139(1), Companies Act, 2013).

• A single filing of ADT-1 is valid for the entire appointed term.

• There is no need to file Form ADT-1 every year unless:

  • There is a change in the auditor.

  • The auditor resigns or is removed.

  • A new auditor is appointed after the term ends.

3. Consequences of Not Filing Form ADT-1: Penalties and Risks

Filing Form ADT-1 on time is a legal requirement. Failure to comply can lead to:

a) Statutory Violations

• Non-filing is a violation under Section 139 of the Companies Act and can attract legal action under Section 147.

b) Late Filing Fees

• Late filing penalties increase with delay, charged as multiples of the normal fee:

Example:
For a company with ₹10 lakh authorized capital (base fee ₹400), a 100-day delay means a fee of ₹400 × 10 = ₹4,000.

c) Additional Legal Penalties

• Under Section 450, non-compliance can lead to:

  • Company fine up to ₹10,000.

  • Officer-in-default fined ₹1,000 per day, capped at ₹2,00,000.

d) Non-Compliant Status on MCA Portal

• The company may be labeled “non-compliant” publicly, causing:

  • Difficulties in obtaining loans or credit.

  • Challenges in bidding for government tenders.

  • Negative impression during audits or investor reviews.

e) Issues in Future Filings

• Without ADT-1 filing, auditor details remain outdated on MCA records, potentially causing errors or rejection of other filings like annual returns or financial statements.

f) Increased Regulatory Scrutiny

• Repeated delays may trigger notices from the Registrar of Companies (ROC) and could lead to detailed inspections or investigations.