🔍 Auditor Appointment & Resignation
Ensure Transparent Financial Governance with Expert Compliance Support
In today’s highly regulated corporate environment, appointing a qualified auditor and managing their resignation are not just compliance necessities but essential steps toward building investor confidence, maintaining financial transparency, and avoiding regulatory penalties.
As your trusted Company Secretary (CS) service provider, we simplify the complexities of auditor appointment and resignation procedures—ensuring your company complies with the Companies Act, 2013 and all relevant statutory provisions.
📌 When is an Auditor Appointment Required?
First Auditor: Within 30 days of incorporation by the Board; else, by members within 90 days.
Subsequent Auditors: Appointed in the AGM to hold office for 5 years (subject to ratification if applicable).
Casual Vacancy: To be filled within 30 days (by Board or shareholders depending on cause).
📑 Types of Auditor Appointments
First Auditor – Appointed by the Board of Directors after incorporation.
Statutory Auditor – Appointed annually (or for a term of 5 years).
Internal Auditor – Required for certain class of companies under Section 138.
Cost Auditor – For companies engaged in specified industries (regulated under Section 148).
📘 Required Documents & Compliance
Board and shareholder resolutions
Consent and eligibility certificate from auditor (Form ADT-1)
Filing with ROC within prescribed time
💼 Who Needs This Service?
All Private Limited, Public Limited, Section 8 Companies
Companies reaching a turnover or capital threshold triggering internal or cost audit
Businesses undergoing mergers, restructuring, or change in auditors
🔄 Auditor Resignation – What You Need to Know
📌 Why Do Auditors Resign?
Professional conflicts
Ethical concerns
Non-cooperation from the client
Change in audit strategy or firm restructuring
📑 Process of Auditor Resignation
Submission of resignation letter with reasons
Filing of Form ADT-3 by the auditor with ROC within 30 days
Company’s duty to appoint new auditor in case of vacancy
Legal Framework
Auditor appointment and resignation are governed primarily by the Companies Act, 2013 and the relevant Rules under the Companies (Audit and Auditors) Rules, 2014.
Key Sections:
Section 139 – Appointment of Auditors
Section 140 – Removal, Resignation of Auditor and Giving of Special Notice
Section 141 – Eligibility, Qualifications and Disqualifications of Auditors
Section 142 – Remuneration of Auditors
Section 144 – Auditor’s Prohibited Services
⏰ Important Timelines
📋 Required Documents for Appointment
Auditor’s Consent Letter
Certificate under Section 139(1) and 141
Board Resolution / Shareholder Resolution
Filed Form ADT-1 with attachments
📤 Required Documents for Resignation
Auditor's Resignation Letter
Board Meeting Documents accepting resignation
Filed Form ADT-3 by the Auditor
ROC intimation of new auditor appointment (if applicable)
⚖️ Penalties for Non-Compliance
Failure to appoint auditor: The company may be liable to pay a fine ranging from ₹25,000 to ₹5 lakh.
Failure to file Form ADT-1 / ADT-3: Additional ROC fees and penalties.
Auditor’s failure to resign properly: May lead to professional misconduct proceedings under ICAI regulations.
🔄 Casual Vacancy - Special Notes
If the casual vacancy is due to resignation, appointment must be made by the members in a general meeting within 3 months.
If it arises due to other reasons, the Board of Directors may fill it within 30 days.
Q1. Is ADT-1 required for the first auditor?
➡️ No, filing ADT-1 is not mandatory for the first auditor appointed by the Board.
Q2. Can a company re-appoint the same auditor for more than 5 years?
➡️ Yes, but only after completion of the cooling-off period for companies under rotation requirements.
Q3. Can an auditor resign during an ongoing audit?
➡️ Yes, but a valid reason must be provided and ROC form ADT-3 must be filed.
Drafting resolutions and consent letters
Filing forms like ADT-1 (appointment) and ADT-3 (resignation)
Advising on eligibility, disqualifications, and tenure
Assistance in appointment in case of casual vacancy
Guidance for audit committee reporting (if applicable)
Compliance checklists and due date reminders
📌 Director Appointment & Resignation
In every successful company, directors are the strategic pillars who ensure smooth governance and long-term growth. Whether you're looking to add a visionary leader to your board or resign a director smoothly and compliantly, every step must be legally sound, properly documented, and timely filed with the Registrar of Companies (ROC).
As a trusted Company Secretary (CS) service provider, we offer end-to-end compliance solutions for appointing or resigning directors—ensuring your company stays fully compliant with the Companies Act, 2013 while making transitions seamless and risk-free.
Startups expanding their board
Companies bringing in investors or experts as directors
Businesses needing an additional director for compliance
Firms restructuring board members
📋 Process of Appointment:
Obtain Director Identification Number (DIN)
Digital Signature Certificate (DSC) of the new director
Board/Shareholder approval (depending on type)
Filing of DIR-12 with MCA within 30 days
Updating statutory registers and records
🔁 Director Resignation – Exit with Compliance
Voluntary resignation by a director
Disqualification due to legal reasons
Change in company structure
Non-performance or internal restructuring
📋 Process of Resignation:
Director submits a written resignation to the company
Board takes note and passes resolution
Company files Form DIR-12 within 30 days
Director may also file DIR-11 (optional for voluntary safety)
Update statutory registers and records
📚 Additional Information on Director Appointment & Resignation
⚖️ Legal Framework
Both appointment and resignation of directors are governed under:
Companies Act, 2013
Companies (Appointment and Qualification of Directors) Rules, 2014
SEBI (LODR) Regulations, for listed companies
📌 Eligibility Criteria for Appointment as a Director
Must be an individual (not a company or firm)
Should have a valid DIN (Director Identification Number)
Not disqualified under Section 164 of Companies Act
For Independent Directors, certain experience and background criteria apply
Women Directors are mandatory in certain prescribed companies (as per Rule 3 of Companies Rules)
📁 Key Documents Required for Appointment
DIN & DSC of the director
Consent in Form DIR-2
Declaration of non-disqualification (Form DIR-8)
Board Resolution / Shareholders Resolution (if applicable)
Identity & Address Proof (PAN, Aadhar, etc.)
Updated register of directors (MBP-1 and other registers)
📁 Key Documents for Resignation
Resignation letter from director
Board Resolution for noting resignation
Filing of Form DIR-12 by company
Optional filing of Form DIR-11 by the resigning director
Updating statutory registers
🕒 Time Limits & Deadlines
❗ Consequences of Non-Compliance
Late filing penalties under Companies Act
Director’s appointment considered invalid
Disqualification under Section 164 for non-compliant companies
Legal action or ROC notice in case of faulty or delayed filings
Attend Board meetings and AGM
Ensure corporate governance and compliance
Contribute to decision-making
Maintain disclosure of interest in Form MBP-1 annually
Avoid conflict of interest under Section 166
🛡️ Our Service Assurance
We provide:
Director Search & Eligibility Check
DIN & DSC facilitation
Resolution drafting (Board & Shareholder)
ROC form preparation & filing (DIR-2, DIR-8, DIR-11, DIR-12)
Maintenance of registers (Register of Directors, MBP-1, etc.)
Legal advice on resignation disputes, disqualification, and reappointment
📌 Why Choose Us?
💼 Common Challenges We Handle for You:
Wrong filing or delayed filings leading to penalties
Confusion in director classification (executive vs non-executive)
Errors in resignation procedure or board meeting minutes
Lack of clarity on director eligibility or disqualification clauses
| Event | Timeline | Form |
| First Auditor Appointment by Board | Within 30 days of incorporation | No ROC form |
| Appointment by Members (if Board fails) | Within 90 days at EGM | ADT-1 |
| Subsequent Auditor Appointment | At AGM | ADT-1 |
| Resignation by Auditor | Within 30 days of resignation | ADT-3 |
| Appointment in Casual Vacancy | Within 30 days | ADT-1 |
| Type of Director | Description |
| Executive Director | Actively involved in company operations |
| Non-Executive Director | Provides strategic inputs but not involved in daily affairs |
| Independent Director | Mandatory for listed/public companies; ensures transparency & governance |
| Additional Director | Appointed by Board till next AGM |
| Alternate Director | Acts in absence of the main director (typically for overseas directors) |
| Nominee Director | Nominated by stakeholders like banks or investors |
| Women Director | Mandatory for certain classes of companies |
| Action | Time Limit |
| Filing DIR-12 for appointment/resignation | Within 30 days of the event |
| Filing DIR-11 by director (optional) | Within 30 days from resignation date |