Record an Auditor Resignation explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A resigning auditor must file e-Form ADT-3 with the Registrar within 30 days of resignation under Section 140(2), stating the reasons and relevant facts. The company then fills the casual vacancy under Section 139(8). Failure to file ADT-3 attracts penalty on the auditor under Section 140(3).
Overview
When a statutory auditor steps down mid-term, the law requires the auditor to formally place the resignation and its reasons on the public record. This is done through e-Form ADT-3. It is the auditor's own duty — not the company's — and the reasons disclosed serve as an early-warning signal to stakeholders and the Registrar.
When It Is Required & Legal Basis
Section 140(2) of the Companies Act, 2013 requires an auditor who resigns to file a statement in the prescribed form (ADT-3) with the company and the Registrar within 30 days of resignation, indicating the reasons and other relevant facts. Rule 8 of the Companies (Audit and Auditors) Rules, 2014 prescribes ADT-3 for this purpose.
Step-by-Step Process
- Submit resignation. The auditor tenders a written resignation to the company, noting the effective date.
- Prepare ADT-3. The auditor prepares e-Form ADT-3 stating the fact of resignation and detailed reasons.
- Sign with DSC. The auditor signs ADT-3 with their own digital signature.
- File within 30 days. File ADT-3 with the Registrar within 30 days of the resignation date and pay the applicable fee.
- Intimate the company. Ensure the company has a copy so it can act on the vacancy.
- Company fills vacancy. The company fills the casual vacancy under Section 139(8) and files ADT-1 for the new auditor.
Forms, Attachments & Fees
| Form | Filed by | Timeline |
|---|---|---|
| ADT-3 | Resigning auditor | Within 30 days of resignation |
| Resignation letter | Auditor to company | Attachment |
| Board resolution | Company — fill casual vacancy | Within 30 days of vacancy |
| ADT-1 | Company — new auditor | Within 15 days of appointment |
Timeline & Due Dates
The auditor's ADT-3 deadline is 30 days from resignation. In parallel, the company must fill the casual vacancy within 30 days (with member approval within three months) and file ADT-1 within 15 days of the new appointment. These clocks run together, so coordinate the handover.
Penalty for Delay / Non-compliance
Under Section 140(3), an auditor who fails to file ADT-3 within the time is liable to a penalty of ₹50,000 or the amount equal to the auditor's remuneration, whichever is less, and a further ₹500 for each day of continuing default, subject to the prescribed maximum. The default sits squarely on the auditor.
Practical Tips
- State reasons candidly but professionally — ADT-3 becomes a public document.
- File within 30 days from the effective date of resignation, not the acceptance date, to be safe.
- Keep the resignation letter and board acknowledgement in the working file.
- Prompt the company to fill the vacancy so the audit is not left unattended.