Removal/Resignation of Auditor
Sonam Geda & Company
RESIGNATION OF AUDITOR
A statutory auditor of the company may resign voluntarily after giving notice to the company in this respect. The period of notice as may be agreed between him/ it and company. The auditor is mandatorily required to file statement of reasons and facts of resignation with the company and registrar.
PROCEDURE OF RESIGNATION OF AUDITOR
- STEP-1: Resignation letter by Auditor:- The process of resignation starts when auditor of company give his/its resignation letter to the company.
- STEP-2: Filing of form ADT-3: The auditor shall within 30 days of resignation file a statement of reasons and facts of resignation in form ADT-3 with the company and Registrar.
- STEP-3: Convene Board Meeting:- After resignation of auditor the company shall conduct board meeting within 30 days of resignation for:
• Taking note of receiving resignation letter from auditor.
• Filing casual vacancy caused due to resignation. - STEP-4: Inform Auditor:- The Company shall inform auditor so appointed in board meeting in place of earlier auditor about his appointment along with the certified copy of the board resolution.
- STEP-5: Holding Extra-Ordinary General Meeting (EGM):- The Company shall within 3 months from the date of appointment of new auditor in board meeting filing casual vacancy hold EGM to approve the appointment of auditor made by the Board of Directors.
- STEP-6: The Company is required to file a notice about appointment of auditor in form ADT-1 to the ROC within 15 days of appointment along with the prescribed filing fees and attachments.
PARTICULARS OF FORM ADT-3
The following particulars are required to be entered in form ADT-3:
- Name of the company.
- CIN of the company.
- Type of auditor i.e. whether individual or firm.
- Details of the auditor.
- Reasons of resignation.
- Membership number of auditor.
- PAN of the auditor.
- Other facts relevant to the resignation, if any.
ATTACHMENTS OF ADT-3
- Resignation letter of the auditor.
- Optional attachments, if any.
DOCUMENTS REQUIRED
- PAN of the auditor.
- DSC of the auditor.
- Resignation letter of the auditor.
FEES
The fees for filing Form e-forms with the registrar of companies are:
| S.No. | Share Capital of the Company (in value) | Fee (in Rupees) |
|---|---|---|
| 1 | Less than 1,00,000 | 200 |
| 2 | 1,00,000 to 4,99,999 | 300 |
| 3 | 5,00,000 to 24,99,999 | 400 |
| 4 | 25,00,000 to 99,99,999 | 500 |
| 5 | 1,00,00,00 or more | 600 |
Penalty
Late filing of e-forms will attract these penalty fees specified below:
| S.No. | Delay in Filing (No. of days) | Penalty |
|---|---|---|
| 1 | Up to 30 | 2 times of Normal Fees |
| 2 | More than 30 to 60 | 4 times of Normal Fees |
| 3 | More than 60 to 90 | 6 times of Normal Fees |
| 4 | More than 90 to 180 | 10 times of Normal Fees |
| 5 | More than 180 | 12 times of Normal Fees |
CONSEQUENCES OF NON-FILING ADT-3 BY AUDITOR
As per the Companies Act, 2013 if the auditor does not file form ADT-3 within 30 days of resignation than he or it shall be punishable with penalty of Rs. 50000 or current remuneration of the auditor whichever is less.
REMOVAL OF AUDITOR
The auditor of company may be removed by the company before expiry of his term if company is not satisfied with the services of the auditor. Before the removal of the auditor the auditor concerned shall be given an opportunity of being heard.
CONDITIONS FOR REMOVAL OF AUDITOR
For the purpose of removal of auditor company is required to:
- Pass special resolution in the general meeting of members for removal of auditor.
- Obtain previous approval of Central Government for the same.
- Give opportunity of heard to the auditor before removal.
PROCEDURE OF REMOVAL OF AUDITOR
- STEP-1: Convening Board Meeting: Meeting of Board of Directors of the company shall be conducted after giving notice for passing resolution to:
• Consider removal of the statutory auditor of the company.
• Authorize person to make an application to Central Government for approval of removal of auditor. - STEP-2: Application to Central Government: The Company shall make an application to the Central Government in form ADT-2 within 30 days of passing board resolution along with the prescribed fees.
- STEP-3: Holding of General Meeting: After obtaining approval of Central Government company shall hold general meeting of members for passing special resolution. The meeting should be held within 60 days of receipt of approval of Central Government.
- STEP-4: Intimation to Auditor: The Company shall intimate the auditor who was removed with a certified copy of the resolution passed along with a copy of the approval of Central Government.
- STEP-5: Filing with Registrar: After passing of special resolution in general meeting company is required to file MGT-14 with the registrar with the requisite fees and copy of special resolution within 30 days of passing resolution.
PARTICULARS OF FORM ADT-2
The following particulars are required to be mentioned in form ADT-2:
- Name and other details of the company.
- SRN of MGT-14 form.
- Details of grounds for seeking removal of auditor.
- Details of other services provided by auditor.
- Appointment date of auditor.
ATTACHMENTS OF ADT-2
- Copy of special resolution.
- Minutes of General Meeting.
- Details of grounds for seeking removal of auditor.
- Optional attachments, if any.
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