Change of Auditor - Remove or Replace Your Statutory Auditor

Not reappointing an auditor whose term has ended is a routine AGM decision requiring only an ordinary resolution and Form ADT-1 - no Central Government approval is needed. Removing an auditor before their term is complete is a separate, heavier process under Section 140(1) requiring a special resolution and prior Central Government approval via Form ADT-2.

No. Central Government approval (via Form ADT-2) is required only when an auditor is being removed before their term expires, under Section 140(1). A normal end-of-term change, where the auditor's tenure simply ends and a new one is appointed at the AGM, does not need this approval.

Form ADT-2 is the application filed with the Central Government (processed through the Regional Director) seeking approval to remove a statutory auditor before their term is complete, as required under Section 140(1) of the Companies Act, 2013.

Yes. Under Section 140(1), the auditor concerned must be given a reasonable opportunity of being heard before the special resolution for their removal is passed. This is a mandatory procedural safeguard, not optional.

Form ADT-1 is filed with the Registrar of Companies to formally intimate the appointment of a new statutory auditor, whether that appointment follows a normal rotation, a resignation, or a Section 140 removal.

The outgoing auditor is required to file Form ADT-3 with the Registrar of Companies, stating the reasons for resignation. The company then needs to fill the resulting vacancy by appointing a new auditor, in some cases through a general meeting within the timeframe prescribed under the Act.

A normal end-of-term change aligned with the AGM typically takes 1-2 weeks for resolutions and filing. Removing an auditor before term completion under Section 140(1) typically takes 4-6 weeks, largely because Central Government approval via Form ADT-2 is not instant.

No. A special resolution is specifically required when removing an auditor before their term ends. A normal end-of-term change of auditor is passed by an ordinary resolution at the AGM.

Certain classes of companies (as prescribed under Section 139(2) and related rules) must rotate their individual auditor every 5 years or their audit firm every 10 years. This is a scheduled, planned change rather than a removal, and follows the normal end-of-term change process, not Section 140.

No. Removal before term completion under Section 140(1) requires valid grounds, a special resolution, the auditor's opportunity to be heard, and Central Government approval - it cannot be done arbitrarily without following this process.

The incoming auditor must provide written consent to the appointment and a certificate confirming they meet the eligibility criteria under Section 141 of the Companies Act, 2013, before the company can proceed with the appointment.

It can, particularly if the change happens mid-year. We recommend planning the transition carefully with both outgoing and incoming auditors to avoid gaps in audit coverage that could delay your financial statement filings.

MCA filing fees for ADT-1 and ADT-2 are charged on a slab basis linked to your company's authorised share capital, as per the MCA fee schedule - these are paid directly on the MCA portal and are separate from our professional fee.

The underlying Section 140 process is the same across company types, but public companies (and certain classes of private companies) are also subject to mandatory auditor rotation requirements under Section 139(2), which private companies below the prescribed thresholds are not.

A removal or appointment done without the legally required resolution or, where applicable, Central Government approval can be treated as invalid, potentially leaving the company without a validly appointed auditor - which creates downstream problems for filing financial statements and holding the AGM.