AUDITOR APPOINTMENT-ADT-1

S.No

PARTICULARS

EXPLANATION

RULE

E-Form ADT-1 is required to be filed pursuant to Section 139 and 140 of the Companies Act, 2013 and pursuant to rule 4(2) of the Companies (Audit and Auditors) Rules, 2014 for notice to Registrar about appointment of auditor.

NATURE OF APPOINTMENT

• First auditor by Board of directors/members/C&AG
• Appointment/Re-appointment in AGM
• Auditor appointed in case of casual vacancy
• Auditor appointed in case of non-re-appointment/ removal of the previous auditor
• Auditor appointed by the Tribunal
• Others

DUE DATE

Fifteen days of the meeting in which the auditor is appointed/reappointed.

CONDITIONS FOR APPOINTMENT AND NOTICE TO REGISTRAR

The auditor appointed under rule 3 shall submit a certificate that –

(a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Chartered Accountants Act, 1949 and the rules or regulations made thereunder;

(b) the proposed appointment is as per the term provided under the Act;

(c ) the proposed appointment is within the limits laid down by or under the authority of the Act;

(d) the list of proceedings against the auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.

TIME OF APPOINTMENT

• At the first annual general meeting, till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting.
• The first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within thirty days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of the company, who shall within ninety days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.

GOVERNMENT COMPANY

• Within a period of one hundred and eighty days from the commencement of the financial year, who shall hold office till the conclusion of the annual general meeting.

• The first auditor shall be appointed by the Comptroller and Auditor-General of India within sixty days from the date of registration of the company and in case the Comptroller and Auditor-General of India does not appoint such auditor within the said period, the Board of Directors of the company shall appoint such auditor within the next thirty days; and in the case of failure of the Board to appoint such auditor within the next thirty days, it shall inform the members of the company who shall appoint such auditor within the sixty days at an extraordinary general meeting, who shall hold office till the conclusion of the first annual general meeting.

CASUAL VACANCY

• in the case of a company other than a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Board of Directors within thirty days, but if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board and he shall hold the office till the conclusion of the next annual general meeting;
• in the case of a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Comptroller and Auditor-General of India within thirty days:

Provided that in case the Comptroller and Auditor-General of India does not fill the vacancy within the said period, the Board of Directors shall fill the vacancy within next thirty days.

RESTRICTIONS ON APPOINTMENT

The following companies:-

1. Listed Company
2. unlisted public companies - paid up share capital of rupees ten crore or more;
3. private limited companies -paid up share capital of rupees  fifty crore or more;
4. all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more.

shall NOT 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: