Form ADT- 2 Removing The Auditor before expiry his term

According to section 140 of the Companies Act, 2013, an auditor can be removed before their term closes with an extraordinary goal of the organization in the wake of acquiring earlier approval from the central government.

In any case, before to starting the method or making a move under section 140 for removal, the auditor concerned will be offered a sensible chance of being heard.

Arrangements identified with the removal of auditor before the expiry of their terms are determined under section 140 of Companies Act 2013 read with organizations (audit and auditors) rules, 2014.

  • Conduct a board meeting to pass a resolution for the removal of the auditor.
  • Auditor has to be given a reasonable opportunity of being heard. This provision was not there in the old companies’ act 1956. But now it’s mandatory to give a reasonable opportunity of being heard to the auditor.
  • Apply for Central government approval within 30days from the date of passing board resolutions in e-Form ADT2 as an attachment to e-Form RD1.
  • After getting approval, the company is required to hold a general meeting within 60 days from the date of approval to pass a special resolution approving the central government’s approval.

Content of application

  • Corporate Identification Number (CIN)
  • Name, Registered Address and Email of the Company.
  • Category of Auditor if Individual or Firm
  • Income Tax PAN of auditor/auditor’s firm
  • Membership Number of the auditor/auditor’s firm
  • Address, City, State, Pin Code and Email ID of the auditor/auditor’s firm
  • Reasons for resignation and any other relevant facts for resignation.