Changing your statutory auditor, explained
| Term | What it means |
|---|---|
| Casual vacancy | A mid-term vacancy from resignation, death or disqualification. The board fills it within 30 days, and on a resignation the members approve the appointment at a general meeting convened within three months of the board's recommendation. |
| ADT-3 | The statement a resigning auditor files within 30 days with the company and the Registrar, under section 140(2). Filed by the auditor, not by the company. |
| ADT-2 | The application to the Central Government to remove an auditor before the term ends, filed within 30 days of the board resolution. |
| Special resolution | A resolution carried by at least three-quarters of the votes cast on it. Required to remove an auditor before the term ends, after Central Government approval. |
Which route applies to you
Answer two questions: has the five-year term ended, and is the auditor leaving willingly?
| Your situation | Route | Governing provision | What it takes |
|---|---|---|---|
| The auditor has resigned | Casual vacancy | Section 139(8) and section 140(2) | Board appoints within 30 days, members approve within three months, ADT-1. The auditor files ADT-3 |
| The auditor has died or become disqualified | Casual vacancy | Section 139(8) | Board appoints within 30 days, ADT-1. No ADT-3 |
| The five-year term has ended and you want a different auditor | Non-reappointment at the AGM | Section 140(4) | Special notice where required, the retiring auditor's representation circulated, new appointment and ADT-1 |
| You want the auditor out before the term ends | Removal | Section 140(1) and Rule 7 | Board resolution, ADT-2 within 30 days, hearing, special resolution within 60 days of approval, MGT-14, then ADT-1 |
| The auditor is alleged to have acted fraudulently | Tribunal-directed change | Section 140(5) | Application to the Tribunal by the Central Government or a concerned person |
The first two routes can be completed in weeks. The removal route runs on the Central Government's timetable and should be planned in months. If the term is close to ending, waiting for the AGM is almost always cheaper and faster than removal.
Resignation: the sequence that actually matters
Two clocks start on the same day and they belong to different people.
| Step | Who acts | Form | Time limit |
|---|---|---|---|
| Auditor resigns | Outgoing auditor | Resignation letter to the company | On resignation |
| Statement of reasons filed | Outgoing auditor | ADT-3, with the company and the Registrar, and also with the Comptroller and Auditor-General for a government company | Within 30 days of resignation (section 140(2)) |
| Casual vacancy filled | Board | Board resolution; incoming auditor's consent and section 141 certificate obtained first | Within 30 days (section 139(8)) |
| Members approve the appointment | Members at a general meeting | Ordinary resolution | Meeting convened within three months of the board's recommendation |
| Appointment notified to the Registrar | Company | ADT-1 | Within 15 days of the meeting at which the auditor was appointed |
| Term of the new auditor | Company | None | Until the next annual general meeting |
The ADT-3 default is the auditor's problem, not yours. Section 140(3) makes the resigning auditor liable to a penalty of ₹50,000, or an amount equal to the auditor's remuneration if that is less, and for a continuing failure a further ₹500 for each day, subject to ₹2,00,000. If the outgoing auditor stalls, the company should still fill the vacancy and file ADT-1 on time. Ask the outgoing auditor for the ADT-3 challan and keep it on file.
Do not leave the chair empty. A company without an auditor cannot get its accounts audited, cannot adopt them, and cannot file AOC-4. A resignation in August with the vacancy filled in November is how a company ends up paying ₹100 a day on its annual filings. See annual ROC filing.
Removal before the term ends
This is the only route that needs a government approval, and the order of the steps is fixed.
| Step | What happens | Form | Time limit |
|---|---|---|---|
| 1. Audit committee | Where the company has an audit committee, it considers the proposal | None | Before the board meets |
| 2. Board resolution | Board resolves to seek removal and to apply to the Central Government | None | Starts the 30-day clock |
| 3. Application | Application to the Central Government, which exercises the power through the Regional Director | ADT-2 | Within 30 days of the board resolution (Rule 7) |
| 4. Hearing | The auditor is given a reasonable opportunity of being heard (section 140(1)) | None | Before the order |
| 5. Approval | The Central Government's approval is received | None | On its own timetable |
| 6. Special resolution | Members remove the auditor by special resolution | None | Within 60 days of receiving the approval |
| 7. Resolution filed | Special resolution filed with the Registrar | MGT-14 | Within 30 days of the resolution |
| 8. New auditor | Consent and section 141 certificate, appointment, notification | ADT-1 | Within 15 days of the appointment |
Reasons matter here. The application has to set out why the company wants the auditor removed, and the auditor will be heard on it. A disagreement over fees, or a wish to appoint the promoter's usual accountant, is not the kind of reason that carries an application. In most such cases the honest advice is to wait for the term to end.
How the work runs, step by step
- Route assessment. Resignation, removal, non-reappointment or a section 140(5) case, confirmed against the appointment date and your AGM.
- Documents. Resignation letter, or the board's proposal for removal with the reasons.
- Incoming auditor. Written consent and the section 141 certificate obtained before the board resolution.
- Resolutions. Board and member resolutions drafted, with special notice wording where section 140(4) applies. The retiring auditor may make a written representation, which the company circulates to the members.
- Filings. The outgoing auditor files ADT-3. We file ADT-2 where removal applies, and ADT-1 for the incoming auditor within 15 days of the appointment. For the incoming auditor's work on the accounts, see statutory audit.
Send your documents by email or WhatsApp. We check the consent, the section 141 certificate and the resolution wording before anything is filed.
Fees
Our professional fee for a change of auditor by resignation or non-reappointment is ₹999. Removal cases are quoted separately, because the work is an application and a hearing, not a filing.
Professional fee
| Service | Regikart fee |
|---|---|
| Change of auditor: route assessment, resolutions, consent and section 141 certificate check, ADT-1 filing | ₹999 |
| Removal before expiry of term, including the ADT-2 application and the special resolution | Quoted after we see the reasons and the company's position |
| First auditor or a five-year appointment at the AGM | ₹999 (see auditor appointment) |
Government fee
| Form | Who files it | Fee |
|---|---|---|
| ADT-1, notice of the new appointment | The company | ₹200 to ₹600 by authorised share capital; ₹200 where there is no share capital |
| MGT-14, special resolution in a removal case | The company | ₹200 to ₹600 by authorised share capital |
| ADT-3, statement of resignation | The outgoing auditor | Paid by the auditor. We do not quote it |
| ADT-2, application for removal | The company | Confirmed in your quote before we file |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
If ADT-1 for the new auditor is late
ADT-1 has no per-day fee. Its additional fee is a multiple of the normal fee, by band of delay. Section 139 is one of the three sections whose first band is a single multiple.
| Delay after the 15-day due date | Additional fee |
|---|---|
| Up to 15 days | 1 × normal fee |
| More than 15 and up to 30 days | 2 × normal fee |
| More than 30 and up to 60 days | 4 × normal fee |
| More than 60 and up to 90 days | 6 × normal fee |
| More than 90 and up to 180 days | 10 × normal fee |
| More than 180 days | 12 × normal fee |
The expensive consequence of a late auditor change is rarely the ADT-1 additional fee. It is the knock-on delay to AOC-4 and MGT-7, which carry ₹100 a day per form with no cap.
What we see go wrong
- Appointing the replacement before taking consent. The consent and the section 141 certificate come before the board resolution, not after.
- Treating the members' approval as optional. On a resignation, the board's appointment has to be approved at a general meeting convened within three months.
- Starting a removal when the term is nearly over. Waiting for the AGM is faster, cheaper and needs no approval.
- Assuming the old auditor's ADT-3 default blocks the company. It does not. Fill the vacancy and file ADT-1.
- Losing the audit trail. Keep the resignation letter, the ADT-3 challan, the consent, the certificate and both resolutions together. A diligence team will ask for all six.
Not sure which route applies? Tell us when the auditor was appointed, whether they have resigned and when your AGM falls. We will confirm the route and the deadlines in writing.