Chartered Accountant · ICAI M.No. 153926 · FRN 136869W · Reviewed on 7 October 2026
What the law fixes
The first auditor is appointed by the board within 30 days of incorporation; thereafter the AGM appoints for five-year terms, reported in ADT-1 within 15 days. The audited financial statements must be laid at the AGM (by 30 September) and filed in AOC-4 within 30 days of it. Auditor rotation is the one obligation most private companies escape — it binds only those with paid-up capital of ₹50 crore+ or borrowings of ₹50 crore+.
“But the company did nothing this year”
Irrelevant — a NIL-revenue company still produces financial statements, and they still need audit. Even formal dormant status under section 455 keeps an audit requirement alive. The only true exits are strike-off or conversion. Budget for the audit as a fixed cost of keeping the company alive, or wind it up deliberately — limbo is the expensive option.
What skipping it actually costs
No audit → no adoptable accounts → no AOC-4/MGT-7 → late fees of ₹100 per day per form with no cap, and after three consecutive years of non-filing, director disqualification under section 164(2) plus the company heading towards strike-off — with the directors’ other directorships caught in the blast. The audit fee is always the cheapest line in that chain. Our audit practice quotes sensibly for small and dormant companies precisely so the chain never starts.