Introduction

In India, companies must adhere to various compliance requirements as prescribed under the Companies Act, 2013. One such critical compliance form is the ADT 3 Form. This form is associated with the resignation or removal of an auditor from a company. Ensuring compliance with the ADT 3 Form is crucial for both companies and auditors to avoid penalties and legal complications.

In this blog, we will explore what the ADT 3 Form is, when it is required, the process of filing it, penalties for non-compliance, and common FAQs regarding its submission.

What is ADT 3 Form? 

The ADT 3 Form is a prescribed form under Rule 8 of the Companies (Audit and Auditors) Rules, 2014, which requires an auditor to notify the Registrar of Companies (ROC) when they resign from their position in a company. It ensures that the regulatory authorities are informed about changes in the company’s audit framework.

When is the ADT 3 Form Required?

The ADT 3 Form is required in the following scenarios:

1. Resignation of an Auditor

• When an auditor voluntarily decides to resign from their role, they must file the ADT 3 Form to inform the ROC of their resignation.

2. Removal of an Auditor by the Company

• If a company removes an auditor before the completion of their term, the outgoing auditor must file the ADT 3 Form to document their exit officially.

3. Non-Reappointment of Auditor

• If an auditor is not reappointed after the completion of their term, they must file the ADT 3 Form to notify authorities of their departure.

4. Company Closure or Mergers

• In cases where the company ceases operations or merges with another entity, the appointed auditor may have to resign, necessitating the submission of the ADT 3 Form.

Legal Framework Governing ADT 3 Form

The ADT 3 Form falls under Section 140(2) of the Companies Act, 2013, which states that an auditor who resigns from their position must file a statement of resignation within 30 days from the date of resignation.

Failure to comply with this requirement may lead to penalties imposed by the ROC.

How to File ADT 3 Form?

Filing the ADT 3 Form is a structured process that involves several steps. Here is a step-by-step guide:

Step 1: Gather Required Information

Before filing, the auditor must collect the following details:

• Company name and Corporate Identification Number (CIN)

• Details of the auditor, including name, membership number, and firm registration number (if applicable)

• Date of resignation and reason for resignation

• Declaration of facts regarding the resignation

Step 2: Login to the MCA Portal

The auditor must log in to the Ministry of Corporate Affairs (MCA) portal to access the ADT 3 Form.

Step 3: Fill in the ADT 3 Form

• Enter the necessary details of the company and the auditor.

• Provide reasons for resignation, ensuring clarity and accuracy.

• Upload supporting documents such as the resignation letter and board resolution (if required).

Step 4: Attach Digital Signature Certificate (DSC)

• The form must be signed using a Digital Signature Certificate (DSC) of the resigning auditor.

Step 5: Submit the Form and Pay the Fees

• Once completed, the form must be submitted to the MCA portal.

• The prescribed fee must be paid online as per the ROC guidelines.

Step 6: Acknowledgment and Tracking

• After submission, an acknowledgment is generated.

• The auditor can track the status of their form using the SRN (Service Request Number) provided by the MCA.

Penalties for Non-Compliance

Non-compliance with the filing of ADT 3 Form can lead to severe penalties under the Companies Act. If the auditor fails to submit the ADT 3 Form within 30 days from the date of resignation:

• The auditor may face a fine ranging from ₹50,000 to ₹5,00,000.

• The company may also face scrutiny and penalties for not ensuring compliance.

Thus, timely filing of the ADT 3 Form is crucial to avoid financial and legal repercussions.

Frequently Asked Questions (FAQs)

1. Can an auditor resign without filing ADT 3 Form?

No, it is mandatory for auditors to file the ADT 3 Form within 30 days of resignation to inform the ROC officially.

2. What happens if the ADT 3 Form is filed after 30 days?

Late filing attracts penalties as per Section 140(2) of the Companies Act, 2013.

3. Can the ADT 3 Form be revised after submission?

No, once filed, the ADT 3 Form cannot be modified. Any discrepancies must be explained separately to the ROC.

4. Who can sign the ADT 3 Form?

The resigning auditor must sign the form using their Digital Signature Certificate (DSC).

5. Is the ADT 3 Form applicable for all types of companies?

Yes, whether a private limited company, public limited company, LLP, or any other registered business, the form must be filed upon an auditor’s resignation.

Conclusion

The ADT 3 Form is a crucial compliance requirement under the Companies Act, 2013. It ensures transparency and regulatory adherence in cases where an auditor resigns or is removed from their position. Timely filing of the form prevents penalties and legal complications.

If you are an auditor planning to resign or a company handling an auditor’s exit, ensure that the ADT 3 Form is duly submitted within the prescribed period.

For further guidance, you may consult a professional Chartered Accountant or legal expert to avoid any compliance issues.

By understanding and following the correct process of filing the ADT 3 Form, auditors and companies can seamlessly comply with MCA regulations and maintain the integrity of their financial reporting processes.