How to File ADT-3 Form for Auditor Resignation?

When an auditor resigns from a company, it is essential to follow the proper legal process for submitting their resignation. The ADT3 form is a mandatory compliance document required under the Companies Act, 2013, which allows an auditor to officially notify the Registrar of Companies (ROC) about their resignation. This guide will walk you through how to file ADT-3 form and the necessary steps involved in ensuring compliance with corporate laws.

Visit: https://ampuesto.in/blog/what-is-the-adt-3-form

What is ADT-3 Form?

The ADT3 form is an essential document used to report the resignation of an auditor. As per Section 140(2) of the Companies Act, 2013, every auditor who resigns from a company must file an ADT-3 form with the ROC within 30 days from the date of resignation. The primary purpose of the form is to maintain transparency and ensure corporate governance standards.

It acts as an official record that allows regulatory authorities to track changes in a company’s audit structure and confirm the auditor’s departure. Without filing the ADT3 form, an auditor's resignation may not be legally recognized, leading to compliance issues for both the auditor and the company.

When is ADT-3 Form Required?

The ADT3 form must be filed in the following situations:

1. Voluntary Resignation by the Auditor

If an auditor decides to resign before completing their term, they must formally notify the company and submit the ADT3 form to the ROC. Common reasons for voluntary resignation include professional conflicts, health issues, or better opportunities.

2. Removal of Auditor by the Company

A company may remove an auditor before their term ends due to reasons such as non-performance, conflicts of interest, or regulatory non-compliance. In such cases, the auditor is required to file the ADT-3 form as an official record of their resignation.

3. Expiry of Audit Term

If an auditor’s tenure is complete and they choose not to continue, they must file the ADT3 form to officially notify the authorities of their departure.

4. Auditor's Disqualification

If an auditor becomes ineligible under Section 141 of the Companies Act, 2013, due to reasons like conflict of interest or misconduct, they must resign and file the ADT-3 form to ensure legal compliance.

Step-by-Step Process to File ADT-3 Form

Step 1: Prepare a Resignation Letter

Before filing the ADT3 form, the auditor must submit a formal resignation letter to the company's board of directors. This letter should clearly mention the reason for resignation and the effective date. The resignation letter should be professional and explain any relevant details to avoid future legal issues.

Step 2: Board Meeting & Acceptance of Resignation

The company should convene a board meeting to acknowledge and accept the auditor’s resignation. The acceptance should be recorded in the official board meeting minutes.

Step 3: Gather Required Information for ADT-3 Form

Before filling out the ADT-3 form, the auditor must collect the following details:

• Company's Corporate Identification Number (CIN)

• Name and Address of the Company

• Name, Membership Number, and Firm Registration Number (if applicable) of the Auditor

• Date of Appointment and Date of Resignation

• Reason for Resignation

• Declaration regarding pending obligations or concerns

Step 4: Fill Out the ADT-3 Form

The auditor must accurately fill out the ADT-3 form with all required information, ensuring there are no discrepancies. Incorrect or incomplete details may lead to rejection of the form by the ROC.

Step 5: Attach Supporting Documents

While submitting the ADT3 form, the following documents are generally required:

• Copy of the Resignation Letter submitted to the company.

• Board Resolution acknowledging the resignation.

• Any additional supporting documents explaining the resignation.

Step 6: Digitally Sign the Form

The ADT-3 form must be digitally signed using the Digital Signature Certificate (DSC) of the resigning auditor.

Step 7: Submit the ADT-3 Form on MCA Portal

Once the form is complete, it must be uploaded and filed on the MCA (Ministry of Corporate Affairs) portal. The required filing fee must also be paid at this stage. Filing can be done online through the MCA21 system.

Step 8: Acknowledgment from MCA

After successful submission, the auditor will receive an acknowledgment confirming that the ADT-3 form has been filed with the ROC. This serves as proof of compliance.

Important Deadlines and Compliance Requirements

• Filing Deadline: The ADT3 form must be filed within 30 days of the resignation date.

• Penalties for Non-Compliance: Failure to file the ADT-3 form within the prescribed timeframe may result in penalties and legal consequences under the Companies Act.

Common Mistakes to Avoid When Filing ADT-3 Form

• Incorrect or incomplete details: Ensure all information provided in the form is accurate.

• Late submission: The form must be filed within the 30-day deadline to avoid penalties.

• Missing digital signature: The ADT3 form must be signed using a valid DSC.

• Failure to attach supporting documents: Always include a copy of the resignation letter and board resolution.

Benefits of Filing ADT-3 Form on Time

• Legal Compliance: Ensures compliance with the Companies Act, 2013.

• Transparency: Helps maintain clear audit records.

• Avoiding Penalties: Filing on time prevents unnecessary fines and legal complications.

• Professional Reputation: Demonstrates professionalism and adherence to ethical standards.

Conclusion

Filing the ADT-3 form is a crucial step for auditors resigning from a company. It ensures compliance with legal regulations and maintains transparency in corporate governance. By following the step-by-step process outlined above, auditors can smoothly complete the filing process and avoid unnecessary penalties. If you have any doubts or require assistance, consulting a professional expert can help simplify the process.

Ensuring the proper filing of ADT3 form not only fulfills regulatory requirements but also upholds the professional integrity of auditors in the corporate ecosystem