Auditor Resignation Services — Managing ADT-3 Filing and Successor Appointment After Resignation.

When a statutory auditor resigns from a company mid-tenure, two parallel compliance obligations are triggered — one for the resigning auditor and one for the company. The auditor must file Form ADT-3 (Notice of Resignation of Auditor) with the RoC within 30 days of the date of resignation, including a statement of reasons for the resignation and any other facts the auditor considers should be brought to the attention of the company and the Registrar. The company must acknowledge the resignation, fill the resulting casual vacancy, and file ADT-1 for the successor auditor.

Under Section 140(2) of the Companies Act, the resignation is not effective under company law until ADT-3 is filed with the RoC. An auditor who resigns without filing ADT-3 within 30 days faces a penalty under the Companies Act. The statement of reasons in ADT-3 must be complete and truthful — an auditor who provides false or misleading reasons is also liable for penalty. Beyond the statutory obligation, a clear statement of reasons in ADT-3 serves as an important governance transparency measure, particularly for listed companies.

Once the resignation is received by the company, a casual vacancy exists in the position of auditor. This vacancy must be filled: the board of directors can appoint a replacement auditor within 30 days of the resignation. However, where the vacancy arises from resignation (rather than death or removal), shareholder ratification of the board-appointed replacement must be obtained at a General Meeting within 3 months of the board's appointment. ADT-1 must then be filed within 15 days of the AGM or EGM at which the replacement is ratified. We assist both the company and the resigning auditor's firm in managing the ADT-3 filing, the casual vacancy process, and the successor's ADT-1.