Form ADT-1 | The Companies Act of 2013[1] has indeed placed a lot of compliances on the companies, and other entities in the Republic of India to ensure the regulated and standard functioning of these entities.
Accounting and producing of account statements essentially boils down as one of the major compliances that has to be strictly adhered to for the purpose of income tax filing and other relevant purposes.
The Indian laws call for a qualified Chartered Accountant to be appointed by the Companies to the position of an Auditor of a company to ensure the smooth and authentic accounting process. This is mandated for the companies only; LLPs are given an exception for the same, they do not have to intimidate the MCA regarding appointment of auditors.
The companies are mandated to intimidate the Ministry of Corporate Affairs regarding the appointment of such auditors. The same has to be done through the due filling and filing of the ADT-1 E-form in the MCA portal.
Before The Companies Act of 2013
Preceding the passing of the Companies Act, the Auditor was mandated to fill E-form 23B following his official appointment as the auditor of the company. The same was to be filed at the earliest, within a period of thirty days from the date of appointment.
The Provisions?
The Companies Act of 1956.
Who?
The responsibility for the filing of 23B form was on the part of the Auditor, following his appointment. The Company did not play a part in the responsibility to intimidate the concerned authority regarding such appointments.
Following the Companies Act of 2013
The Companies Act of 2013, which came into enforcement on the , regulated this process and included the ADT-1 form in its ambit.
The Provisions?
Section 139(1) of the Companies Act of 2013 provides for the mandating of ADT-1 form following appointment of auditors.
Who?
The Responsibility for filing the same was shifted to the part of the company which is appointing the auditor. The Company has to file the ADT-1 Form following its Annual General Meeting and the appointment of the auditor.
How?
Following the appointment of an individual as the auditor, the company shall convey the same to the auditor and file the E-form ADT-1 with all the necessary documents at the Ministry of Corporate Affairs portal.
The Details of ADT-1 Form ?
In standard filling in-
Relevant details such as the nature of appointment of the auditor (category of auditor) , name of the auditing firm/the auditor, PAN of the auditor, address of the auditor’s office/auditing firm’s office and the company, the time period for which the auditor is appointed, date of appointment, registration number or membership number of the previous auditor or auditing firm, respectively, who has/have ended their term, the CIN (Corporate Identification Number) of the company appointing, permanent account number of the Income Tax of the Auditor/ Auditing firm are some of the vital details that have to be provided in the form.
In case of casual vacancy-
Details pertaining to the reason for vacancy has to be provided in addition to the above mentioned details. Section 139(8) of the Companies Act, 2013 entails out the process to be followed for casual vacancy, appointments pertaining to the same.
What are the mandated Documents?
The below mentioned documents have to be attached to the Form ADT-1:
· Consent in writing from the auditor, expressing no objection to his appointment as the auditor of a particular company
· The authentic copy of the Board Resolution that was passed in the Annual General Meeting of the Company
· The authentic copy of the intimidation sent from the company to the auditor pertaining to his appointment.
· A signed certificate from the Auditor to put in on record that his/her appointment shall withstand those disqualification conditions provided under Section 141 of the Companies Act of 2013.
Due Dates of ADT-1 Form ?
For a running company-
The due date for filing an ADT form for a company that is already functioning is 15 days from the date of date of the Annual General Meeting in which the auditor was appointed (The auditor can be re-appointed if the need arises, in accordance with the relevant provisions of the Companies Act).
For a newly incorporated company-
The first Board meeting shall be hosted within thirty days of formation of the company, as mandated by the Companies Act. In this meeting, the Auditor has to be appointed by the company. Following the appointment, the ADT-1 form may be filed within 15 days of such appointment. This is not mandatory as 139 (6) of the Companies Act, discussing the appointment of the first auditor, does not mandate the filing of ADT-1 form for the first appointment. However, it is good and ethical in business practice to file the same for the first appointment too.
Post Filling Requirement of ADT-1 Form ?
The form has to be digitally signed by the registered director of the company after filing the requisite details. The form has to be filed at the MCA portal following logging in into the registered account. The E-form is auto approved. Following successful registration, an acknowledgement mail is sent to the registered email ids.
What is the Fees for ADT-1 Form ?
The fees for filing the form is determined on the basis of nominal share capital of the firm.
In the event of The Nominal Share capital amounting to,
1. An amount less than 1 lakh, the fees is capped at 200.
2. An amount between 1 lakh to 5 lakhs, the fees is capped at 300.
3. An amount between 5 lakhs to 25 lakhs, the fees is capped at 400.
4. An amount between 25 lakhs to 1 crore, the fees is capped at 500.
5. An amount exceeding 1 crore, the fees is capped at 600.
What are the Penalties for ADT-1 Form ?
Penalties for delay of filing the form are levied as follows-
In the event if a delay of,
1. Up to a period of 30 days, the penalty shall be twice the normal fees.
2. A period between 30 to 60 days, the penalty shall be four times the normal fees.
3. A period between 60 to 90 days, the penalty shall be six times the normal fees.
4. A period between 90 to 180 days, the penalty shall be ten times the normal fees.
5. A period exceeding 180 days, the penalty shall be twelve times the normal fees.
Important to Note:
Filing of ADT-1 form is mandatory for all registered companies in India, irrespective of the fact that they are public/private/listed/unlisted entities.
The form has to be filed within 15 days of the appointment of the auditor at the MCA portal, with the relevant details, documents, and fees. The delay or failure to file the same shall be accompanied by hefty fines.
Conclusion
Each year, a company must submit form ADT-1 to the Registrar of Companies (ROC) to notify them of their Auditor’s appointment. According to section 139(1) of the Companies Act, 2013, when a business engages an auditor, it is required to notify the ROC. It must be filed within 15 days of the corporation’s annual general meeting or first board of directors meeting.