Companies Act 2006

Removal of auditorU.K.

510Resolution removing auditor from officeU.K.

(1)The members of a company may remove an auditor from office at any time.

(2)This power is exercisable only—

(a)by ordinary resolution at a meeting, and

(b)in accordance with section 511 (special notice of resolution to remove auditor).

(3)Nothing in this section is to be taken as depriving the person removed of compensation or damages payable to him in respect of the termination—

(a)of his appointment as auditor, or

(b)of any appointment terminating with that as auditor.

[F1(4)An auditor may not be removed from office before the expiration of his term of office except—

(a)by resolution under this section, or

(b)in accordance with section 511A.]

511Special notice required for resolution removing auditor from officeU.K.

(1)Special notice is required for a resolution at a general meeting of a company removing an auditor from office.

(2)On receipt of notice of such an intended resolution the company must immediately send a copy of it to the auditor proposed to be removed.

(3)The auditor proposed to be removed may make with respect to the intended resolution representations in writing to the company (not exceeding a reasonable length) and request their notification to members of the company.

(4)The company must (unless the representations are received by it too late for it to do so)—

(a)in any notice of the resolution given to members of the company, state the fact of the representations having been made, and

(b)send a copy of the representations to every member of the company to whom notice of the meeting is or has been sent.

(5)If a copy of any such representations is not sent out as required because received too late or because of the company's default, the auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting.

(6)Copies of the representations need not be sent out and the representations need not be read at the meeting if, on the application either of the company or of any other person claiming to be aggrieved, the court is satisfied that the auditor is using the provisions of this section to secure needless publicity for defamatory matter.

The court may order the company's costs (in Scotland, expenses) on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

[F2511APublic interest companies: application to court to remove auditor from officeU.K.

(1)This section applies only to a public interest company.

(2)The competent authority may apply to the court for an order removing an auditor of a company from office if the authority considers that there are proper grounds for removing the auditor from office.

(3)The members of a company may apply to the court for an order removing an auditor of the company from office if the applicant or applicants consider that there are proper grounds for removing the auditor from office.

(4)If the court is satisfied, on hearing an application under subsection (2), that there are proper grounds for removing the auditor from office, it may make an order removing the auditor from office.

(5)If the court is satisfied, on hearing an application under subsection (3), that—

(a)the applicants represent in total—

(i)not less than 5% of the voting rights of all the members having a right to vote at a general meeting of the company, or

(ii)not less than 5% in nominal value of the company’s share capital, and

(b)there are proper grounds for removing the auditor from office,

the court may make an order removing the auditor from office.

(6)For the purposes of this section, divergence of opinions on accounting treatments or audit procedures are not to be taken to be proper grounds for removing an auditor from office.

F3(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

F4512Notice to registrar of resolution removing auditor from officeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

513Rights of auditor who has been removed from officeU.K.

(1)An auditor who has been removed by resolution under section 510 [F5or by order of the court under section 511A] has, notwithstanding his removal, the rights conferred by section 502(2) in relation to any general meeting of the company—

(a)at which his term of office would otherwise have expired, or

(b)at which it is proposed to fill the vacancy caused by his removal.

(2)In such a case the references in that section to matters concerning the auditor as auditor shall be construed as references to matters concerning him as a former auditor.