E-Form INC 20A

No need to file ADT-1

No need to file ADT-1 in case of appointment of first auditor of the company – Companies Act, 2013 (‘CA, 2013’)

Form ADT 1 governed by following :

  •  Section 139 of the Companies Act, 2013
  • Section 140 of the Companies Act, 2013
  • Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014.

The first Auditor shall be appointed in the company by Board of Director under Section 139(6) or 139(7) of the Companies Act, 2013.

Section 139(6) of CA states for appointment of first auditor of company other than Government Company

Section 139(7) of CA, 2013 states for appointment of first auditor for Government Company.

The existing Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014, mentions only about Section 139(1) of the CA, 2013 and there is no reference for Section 139(6) & 139 (7) of CA, 2013, therefore, there is no requirement under CA, 2013 & rules thereof, to file ADT-1 in case of appointment of first auditor of the company.

Refer the following-

“Section 139(6) reads as : Notwithstanding anything contained in sub-section (1), the first auditor of a company, other than a Government company, shall be appointed by the Board of Directors within thirty days from the date of registration of the company and in the case of failure of the Board to appoint such auditor, it shall inform the members of the company, who shall within ninety days at an extraordinary general meeting appoint such auditor and such auditor shall hold office till the conclusion of the first annual general meeting.”

“Section 139(7) reads as : Notwithstanding anything contained in sub-section (1) or sub-section (5), in the case of a Government Company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government, or Governments, or partly by the Central Government and partly by one or more State Governments, the first auditor shall be appointed by the Comptroller and Auditor-General of India within sixty days from the date of registration of the company and in case the Comptroller and Auditor-General of India does not appoint such auditor within the said period, the Board of Directors of the company shall appoint such auditor within the next thirty days; and in the case of failure of the Board to appoint such auditor within next thirty days, it shall inform the members of the company who shall appoint such auditor within sixty days at an extraordinary general meeting, who shall hold office till the conclusion of the first annual general meeting.”

“Rule 4(2) reads as: The notice to Registrar about appointment of auditor under fourth proviso to sub- section (1) of section 139 shall be in Form ADT-1.”

In view of the above, Form ADT-1 is not required to submit before ROC at the time of appointment of first auditor of Company under section 139(6) or 139(7) of CA, 2013. Section 139(1) of the CA, 2013 mentions about the appointment of auditor other than the first auditor.

Remark: Form ADT-1 is not required to submit before ROC at the time of appointment of first auditor of Company under section 139(6) or 139(7) of CA, 2013. Section 139(1) of the CA, 2013 mentions about the appointment of auditor other than the first auditor. However, for good governance practice, Form ADT-1 can be filed in case of appointment of first auditor.

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