Board Meeting : Resignation of Auditor

A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters. A Board Meeting is to be held and attended by the Board of Directors of the Company to discuss the topic of the Resignation of the Auditor as well.

The Auditor will typically hold term till the conclusion of 6th AGM or 5 years. The Appointment of an Auditor can also be made for a period of 1 year, renewable at each annual general meeting.

Rotation of Auditors

When there is resignation of Auditor then while re-appointing Auditors for a limited company or specified company, it is important to be aware of the regulations pertaining to the rotation of auditors:

  • Individuals as an Auditor cannot be appointed as an Auditor for a term of more than 5 years.
  • A firm of Auditors cannot be appointed as Auditors for more than two terms of 5 years.
  •  An Auditor who has completed his/her term of 5 years will also not be eligible for re-appointment for 5 years from completion of his/her term.

Following are the important points that are to be taken under consideration by the Board of Directors while rotating auditors of the Company:

  • In the case of an auditor, the period for which he/she has held office as auditor prior to the commencement of the Act shall be taken into account for calculating the period of five consecutive years or ten consecutive years, as the case may be.
  • The incoming auditor or audit firm shall not be eligible if such auditor or audit firm is associated with the outgoing auditor or audit firm under the same network of audit firms
  • Break in the term for a continuous period of five years shall be considered as fulfilling the requirement of rotation.
  • If a partner, who is in charge of an audit firm and also certifies the financial statements of the company, retires from the said firm. And joins another firm, such other firm shall also be ineligible to be appointed for a period of five years.

Thus, review your Board Meeting Minutes immediately after the meeting. When your board meeting minutes are complete and finished, make sure they are distributed to board members as soon as possible. Once the minutes are approved by a vote of the members during the board meeting, they become part of the official record of the organization. It’s important that a copy of all minutes are kept in one place.

Download Meeting Minutes
Download Sample Board Meeting for Resignation of Auditors
Download Meeting Minutes
Download Sample Board Meeting for Resignation of Auditors


What are the documents that are to be filed with the ADT-2 for the removal of the auditor of a Company?

The documents that are reuired to be filed with the ADT-2 :
1. Service request number of Form MGT-14
2. Date of
– Filing the form
– Passing the special resolution
– The annual/extraordinary general meeting

How many years can an auditor audit for a Company?

Auditors must be rotated or changed periodically every 5 years by the company to maintain compliance with the Companies Act, 2013. The auditor typically holds term till the conclusion of 6th AGM or 5 years. Moreover, the appointment of an auditor can also be made for a period of 1 year which is renewable at each annual general meeting.

Is it necessary to fill in any casual vacancy of an auditor?

Any casual vacancy of the auditor must be filled by the Board of Directors within 30 days. If the casual vacancy is on account of a resignation of an auditor, then the appointment of the auditor must be approved at an Extra-Ordinary General Meeting. Which is to be convened within 3 months of the recommendation of the Board.

Got Questions? Ask Away!

  1. Hi @Dixita

    ADT-2 is to be filed for removal of auditor(s) from their office before expiry of term while ADT-3 is the notice of resignation by the Auditor.

    A Company will need to hold a Board Meeting and pass a resolution in such cases. You can read more about that here:

    Hope this helps!