Auditor Resignation: Guide to Filing Form ADT-3 under the Companies Act, 2013

Auditor resignation may look like a simple professional decision, but under Indian company law, it is a serious legal compliance matter. Every company in India must have a statutory auditor, and when an auditor resigns, the law requires proper disclosure, filings, and timelines.

For business owners, chartered accountants, and compliance professionals, understanding auditor resignation in India is essential to avoid penalties and compliance issues.

In this guide, you will clearly understand what auditor resignation means, why Form ADT-3 is mandatory, how to file it step by step, penalties for delay, and how companies appoint a new auditor—all explained using simple language and examples.

What Is Auditor Resignation?

Auditor resignation means that a statutory auditor decides to step down before completing their appointed term.

Under the Companies Act, 2013, an auditor cannot resign informally. Since auditors play a key role in verifying financial statements and ensuring legal compliance, their resignation must follow a formal legal process.

In simple words, an auditor must:

• Inform the company officially
• Inform the government (ROC) officially
• Clearly explain why they are resigning

Why Do Auditors Resign in Real Life?

In practical Indian business situations, auditors resign for many genuine reasons, such as:

• Non-payment or delay in audit fees
• Disagreement with management on accounting treatment
• Non-availability of information or documents
• Excess workload or client restructuring
• Merger of audit firms
• Personal reasons like health or retirement

The law requires auditors to state these reasons clearly so that regulators and stakeholders understand the situation.

Why Auditor Resignation Matters for Companies?

Auditor resignation directly impacts:

• Company law compliance
• Timely completion of audits
• Filing of financial statements
• Investor and lender confidence

Legal Requirement Under Section 140(2) of the Companies Act, 2013

When an auditor resigns, they must:

• Submit a resignation letter to the company
• File Form ADT-3 with the ROC
• Do this within 30 days from the resignation date
• Clearly mention:
  • Reason for resignation
  • Relevant facts or circumstances

For government companies, the auditor must also inform the C&AG of India.

This ensures transparency, accountability, and proper public records.

Penalty for Not Filing ADT-3 (Very Important)

If Form ADT-3 is not filed on time:

• Minimum penalty: ₹50,000 or auditor’s remuneration (whichever is lower)
• Additional penalty: ₹500 per day of delay
• Maximum penalty: ₹5,00,000

Example

• Resignation date: 10 July
• Last date to file ADT-3: 9 August
• Actual filing date: 20 August
• Delay = 11 days
• Penalty = ₹50,000 + (₹500 × 11) = ₹55,500

What Is Form ADT-3?

Form ADT-3 is an MCA e-form used by the resigning auditor to officially inform the Registrar of Companies about their resignation.

It captures:

• Auditor details
• Company details
• Date of resignation
• Reason for resignation
• Supporting documents

Who Has to File Form ADT-3?

The auditor, not the company.

This is a common beginner mistake. The legal responsibility lies entirely with the resigning auditor.

Information Required in Form ADT-3

The form must be digitally signed using DSC.

Step-by-Step Guide to Filing Form ADT-3

• Step 1: Prepare a formal resignation letter mentioning the resignation date, clear reason, and auditor’s signature.
• Step 2: Log in to the MCA portal at mca.gov.in using registered credentials.
• Step 3: Download Form ADT-3 from MCA → Forms & Downloads → E-Forms.
• Step 4: Enter the company’s CIN so company details auto-populate.
• Step 5: Fill in auditor details such as PAN, membership number, FRN, address, and email ID.
• Step 6: Clearly state the reason for resignation (e.g., non-payment of fees, accounting disagreement, workload).
• Step 7: Attach the signed resignation letter as a supporting document.
• Step 8: Affix the auditor’s Digital Signature Certificate (DSC).
• Step 9: Upload Form ADT-3 and pay the applicable MCA filing fees.
• Step 10: Generate and save the SRN (Service Request Number) as proof of filing.
• Step 11: Share the filed ADT-3 PDF, payment challan, and resignation letter with the company (and also with C&AG in case of government companies).

Normal Government Fees for Filing Form ADT-3 with ROC

Appointment of New Auditor After Resignation

Auditor resignation creates a casual vacancy.

For Non-Government Companies

• Board appoints new auditor
• Shareholders approve within 3 months
• Company files Form ADT-1 within 15 days

For Government Companies

• C&AG appoints auditor within 30 days
• If not, Board or members step in
• The new auditor holds office till the next AGM.

Conclusion

Auditor resignation under the Companies Act, 2013 is a strictly regulated legal process, not a casual exit. Filing Form ADT-3 on time, appointing a new auditor quickly, and following proper procedures protects both the auditor and the company.

By understanding the rules in a simple, practical way, you can confidently manage auditor resignation compliance without fear or confusion.

Sample Resignation letter

In CA Firm’s Letter Head

Date: ___ / ___ / 20__

To

Subject: Resignation from the position of Statutory Auditor of ABC Limited

Dear Sir/Madam,

We, ABCDEF & Co., Chartered Accountants, hereby tender our resignation from the position of Statutory Auditor of ABC Limited, bearing CIN: XXXXXXXXXXXXX, with effect from ___ / ___ / 20__.

This resignation is being submitted due to [clearly mention the reason – e.g., non-payment of audit fees / preoccupation with other professional assignments / professional reasons]. There are no other matters or circumstances connected with our resignation which we are required to bring to the notice of the members or creditors of the company.

We request the Board to kindly take note of our resignation and make necessary arrangements for the appointment of a new statutory auditor in accordance with the provisions of the Companies Act, 2013.

We further confirm that we shall file Form ADT-3 with the Registrar of Companies within the prescribed time as required under Section 140(2) of the Companies Act, 2013.

We thank the management and staff of ABC Limited for the cooperation extended to us during our tenure as statutory auditors.