ADT-1 FILING NOW MANDATORY FOR FIRST AUDITOR APPOINTMENT

INTRODUCTION

The Ministry of Corporate Affairs (MCA) has introduced a crucial regulatory update that redefines how companies in India must comply with statutory auditor appointment requirements. With Notification G.S.R. 359(E) dated May 30, 2025, the Companies (Audit and Auditors) Amendment Rules, 2025 will come into effect on July 14, 2025, marking a significant shift in the process of appointing and reporting the first auditor of a company. Read the notification here: Notifications

One of the most notable implications of this amendment is the removal of the long-standing exemption regarding the filing of Form ADT-1 for first auditor appointments made by the Board of Directors. The change brings all types of first auditor appointments under the mandatory filing regime, enhancing accountability and alignment with broader corporate transparency and regulatory oversight goals.

This article explores the details of the amendment, its implications for corporate compliance in India, the updated first auditor appointment procedure, and a step-by-step guide on how to file ADT-1 effectively under the revised rules.

UNDERSTANDING THE AMENDMENT

Prior to this amendment, the legal position was guided by Rule 4(2) of the Companies (Audit and Auditors) Rules, 2014. It explicitly stated:

“The notice of appointment of the first auditor by the Board shall not be filed with the Registrar.”

As a result, companies were exempted from filing Form ADT-1 when the Board of Directors appointed the first auditor within 30 days of incorporation. Filing was only required in two cases:

• When shareholders (members) appointed the first auditor in an Extraordinary General Meeting (EGM) if the Board failed to do so.
• For subsequent statutory auditor appointments, typically at the first Annual General Meeting (AGM).

However, under the amended rules effective from July 14, 2025, ADT-1 for first auditor appointments becomes mandatory, regardless of whether the appointment is made by the Board, members, or the Comptroller and Auditor General (C&AG) in case of government companies.

TMWala can assist companies in navigating these new obligations with ease. From real-time updates on MCA changes to full-service ADT-1 preparation and submission.

FIRST AUDITOR APPOINTMENT PROCEDURE: THEN VS. NOW

To appreciate the practical implications of the new rule, let’s compare the appointment and filing requirements before and after the amendment:

Aspect	Before July 14, 2025	After July 14, 2025
ADT-1 filing (First Auditor by Board)	Not Required	Mandatory
ADT-1 filing (First Auditor by Members)	Required	Required
ADT-1 filing (Auditor at AGM)	Required	Required
ADT-1 Form Format	Limited appointment types listed	Revised format with all appointment types

The revised Form ADT-1 now includes a clearly defined section where companies must specify the “Nature of Appointment”, including:

• First Auditor by the Board of Directors
• First Auditor by Members
• First Auditor by C&AG

This simple but impactful change brings greater clarity and structure to the statutory auditor appointment process, helping regulators ensure better compliance tracking from the very inception of a company.

CORPORATE COMPLIANCE IN INDIA: WHY THIS AMENDMENT MATTERS

For corporate compliance in India, this change means companies must now be more proactive in handling their audit-related documentation. Internal teams, particularly those involved in finance, legal, and secretarial functions, will need to align their processes with the new rule to avoid penalties and delays in regulatory clearances.

TMWala simplifies this transition by offering automated compliance tracking, reminders for due dates, and expert review of your filings.

Importantly, the amendment applies only to companies incorporated on or after July 14, 2025. For all such companies:

• The Board must appoint the first auditor within 30 days of incorporation.
• Form ADT-1 must be filed within 15 days from the date of such appointment, even if made by the Board.

Failure to comply will now result in penalties as per the Companies (Registration Offices and Fees) Rules, 2014.

HOW TO FILE ADT-1: STEP-BY-STEP PROCESS UNDER NEW RULES

Given that Form ADT-1 is now mandatory for first auditor appointments by the Board, it’s essential to understand how to file ADT-1 accurately and on time.

1. Obtain Digital Signature Certificate (DSC)

Ensure that the director or authorized signatory who will be signing the form holds a valid Digital Signature Certificate (DSC). This is necessary for electronically verifying and submitting the form.

2. Secure Director Identification Number (DIN)

The director signing the form must possess a valid Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA).

3. Download the Latest Form ADT-1

Visit the official MCA portal and download the current version of Form ADT-1. The form has recently been revised to include new categories of auditor appointments, including first auditors appointed by the Board.

4. Enter Company and Auditor Details

Accurately fill in the required information, including:

• Name of the company
• Registered office address
• Corporate Identification Number (CIN)
• Auditor’s details (name, address, PAN, membership number, etc.)

5. Attach Required Supporting Documents

Upload the necessary documentation to support the appointment or reappointment, which typically includes:

• Certified copy of the Board or shareholder resolution
• Auditor’s consent letter confirming acceptance of the appointment

6. Digitally Sign the Form

Use the DSC of the authorized director to digitally verify the form. Ensure that the DSC is registered and valid on the MCA portal.

7. Submit Form Electronically to ROC

After verification, electronically submit the form via the MCA portal. Ensure all mandatory fields and attachments are complete to avoid rejection.

8. Pay the Prescribed Filing Fee

After submission, proceed to make the required online payment of the statutory filing fee, which varies based on the company’s authorized capital.

9. Receive Acknowledgment

Upon successful filing and fee payment, the system will generate an acknowledgment. A confirmation email will also be sent to the company’s registered email ID.

PENALTIES FOR NON-COMPLIANCE

With the removal of the earlier exemption, non-compliance can now result in penalties. As per the Companies (Registration Offices and Fees) Rules, 2014, the following late filing penalties apply:

Delay Period	Penalty (Multiples of Normal Fee)
Up to 30 days	2 times
31 to 60 days	4 times
61 to 90 days	6 times
91 to 180 days	10 times
More than 180 days	12 times

Thus, timely filing is not just a best practice; it’s a financial necessity.

PRACTICAL EXAMPLE: APPLICATION OF THE NEW RULE

Let’s look at this with a practical scenario.

Suppose ABC Pvt Ltd. is incorporated on July 15, 2025. The Board of Directors appointed the first statutory auditor on July 20, 2025. Under the new rule, ABC Pvt Ltd. must file Form ADT-1 with the ROC by August 4, 2025, which is 15 days from the date of appointment.

Under the old rule, this filing would not have been required if the appointment had been made by the Board. Now, it is mandatory.

WHAT COMPANIES MUST DO NOW

In light of these changes, companies, especially those being incorporated from mid-July 2025 onward, must take immediate steps to align with the revised compliance framework.

1. Update Internal Protocols

Legal and compliance teams must revise their checklists and internal compliance calendars to reflect the mandatory nature of ADT-1 filing for first auditor appointments.

2. Educate Relevant Stakeholders

Board members, finance teams, and company secretaries should be made fully aware of the new requirements and timelines.

3. Use Updated Templates

Prepare revised Board resolution formats and documentation to facilitate faster processing and avoid last-minute delays.

4. Leverage Professional Help

If needed, consult with a practicing Company Secretary (CS) or Chartered Accountant (CA) to ensure smooth filing and documentation.

CONCLUSION

The first auditor appointment procedure has entered a new era of regulatory rigor. With ADT-1 for first auditor appointments now mandatory under the revised rules effective July 14, 2025, companies must treat this compliance as a non-negotiable statutory obligation.

For all companies incorporated on or after July 14, 2025, filing ADT-1 is no longer optional, even when the first auditor is appointed by the Board. Ensure your teams are prepared, your timelines are in check, and your filings are accurate.

Corporate compliance in India is evolving, and this is one change you cannot afford to ignore.

And with platforms like TMWala offering support for filings, reminders, and expert guidance, adapting to these changes has never been more manageable.