(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.
(4)An auditor may not be removed from office before the expiration of his term of office except by resolution under this section.
(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.
(1)Where a resolution is passed under section 510 (resolution removing auditor from office), the company must give notice of that fact to the registrar within 14 days.
(2)If a company fails to give the notice required by this section, an offence is committed by—
(a)the company, and
(b)every officer of it who is in default.
(3)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1)An auditor who has been removed by resolution under section 510 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.
(1)This section applies where a resolution is proposed as a written resolution of a private company whose effect would be to appoint a person as auditor in place of a person (the “outgoing auditor”) whose term of office has expired, or is to expire, at the end of the period for appointing auditors.
(2)The following provisions apply if—
(a)no period for appointing auditors has ended since the outgoing auditor ceased to hold office, or
(b)such a period has ended and an auditor or auditors should have been appointed but were not.
(3)The company must send a copy of the proposed resolution to the person proposed to be appointed and to the outgoing auditor.
(4)The outgoing auditor may, within 14 days after receiving the notice, make with respect to the proposed resolution representations in writing to the company (not exceeding a reasonable length) and request their circulation to members of the company.
(5)The company must circulate the representations together with the copy or copies of the resolution circulated in accordance with section 291 (resolution proposed by directors) or section 293 (resolution proposed by members).
(6)Where subsection (5) applies—
(a)the period allowed under section 293(3) for service of copies of the proposed resolution is 28 days instead of 21 days, and
(b)the provisions of section 293(5) and (6) (offences) apply in relation to a failure to comply with that subsection as in relation to a default in complying with that section.
(7)Copies of the representations need not be circulated 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.
(8)If any requirement of this section is not complied with, the resolution is ineffective.
(1)This section applies to a resolution at a general meeting of a company whose effect would be to appoint a person as auditor in place of a person (the “outgoing auditor”) whose term of office has ended, or is to end—
(a)in the case of a private company, at the end of the period for appointing auditors;
(b)in the case of a public company, at the end of the next accounts meeting.
(2)Special notice is required of such a resolution if—
(a)in the case of a private company—
(i)no period for appointing auditors has ended since the outgoing auditor ceased to hold office, or
(ii)such a period has ended and an auditor or auditors should have been appointed but were not;
(b)in the case of a public company—
(i)there has been no accounts meeting of the company since the outgoing auditor ceased to hold office, or
(ii)there has been an accounts meeting at which an auditor or auditors should have been appointed but were not.
(3)On receipt of notice of such an intended resolution the company shall forthwith send a copy of it to the person proposed to be appointed and to the outgoing auditor.
(4)The outgoing auditor 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.
(5)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.
(6)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 outgoing auditor may (without prejudice to his right to be heard orally) require that the representations be read out at the meeting.
(7)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 outgoing auditor, notwithstanding that he is not a party to the application.
(1)An auditor of a company may resign his office by depositing a notice in writing to that effect at the company’s registered office.
(2)The notice is not effective unless it is accompanied by the statement required by section 519.
(3)An effective notice of resignation operates to bring the auditor’s term of office to an end as of the date on which the notice is deposited or on such later date as may be specified in it.
(1)Where an auditor resigns the company must within 14 days of the deposit of a notice of resignation send a copy of the notice to the registrar of companies.
(2)If default is made in complying with this section, an offence is committed by—
(a)the company, and
(b)every officer of the company who is in default.
(3)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum and, for continued contravention, a daily default fine not exceeding one-tenth of the statutory maximum.
(1)This section applies where an auditor’s notice of resignation is accompanied by a statement of the circumstances connected with his resignation (see section 519).
(2)He may deposit with the notice a signed requisition calling on the directors of the company forthwith duly to convene a general meeting of the company for the purpose of receiving and considering such explanation of the circumstances connected with his resignation as he may wish to place before the meeting.
(3)He may request the company to circulate to its members—
(a)before the meeting convened on his requisition, or
(b)before any general meeting at which his term of office would otherwise have expired or at which it is proposed to fill the vacancy caused by his resignation,
a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.
(4)The company must (unless the statement is received too late for it to comply)—
(a)in any notice of the meeting given to members of the company, state the fact of the statement having been made, and
(b)send a copy of the statement to every member of the company to whom notice of the meeting is or has been sent.
(5)The directors must within 21 days from the date of the deposit of a requisition under this section proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given.
(6)If default is made in complying with subsection (5), every director who failed to take all reasonable steps to secure that a meeting was convened commits an offence.
(7)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction to a fine not exceeding the statutory maximum.
(8)If a copy of the statement mentioned above 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 statement be read out at the meeting.
(9)Copies of a statement need not be sent out and the statement need not be read out at the meeting if, on the application either of the company or of any other person who claims 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 such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.
(10)An auditor who has resigned has, notwithstanding his resignation, the rights conferred by section 502(2) in relation to any such general meeting of the company as is mentioned in subsection (3)(a) or (b) above.
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.
(1)Where an auditor of an unquoted company ceases for any reason to hold office, he must deposit at the company’s registered office a statement of the circumstances connected with his ceasing to hold office, unless he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the company.
(2)If he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the company, he must deposit at the company’s registered office a statement to that effect.
(3)Where an auditor of a quoted company ceases for any reason to hold office, he must deposit at the company’s registered office a statement of the circumstances connected with his ceasing to hold office.
(4)The statement required by this section must be deposited—
(a)in the case of resignation, along with the notice of resignation;
(b)in the case of failure to seek re-appointment, not less than 14 days before the end of the time allowed for next appointing an auditor;
(c)in any other case, not later than the end of the period of 14 days beginning with the date on which he ceases to hold office.
(5)A person ceasing to hold office as auditor who fails to comply with this section commits an offence.
(6)In proceedings for such an offence it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(7)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(1)This section applies where the statement deposited under section 519 states the circumstances connected with the auditor’s ceasing to hold office.
(2)The company must within 14 days of the deposit of the statement either—
(a)send a copy of it to every person who under section 423 is entitled to be sent copies of the accounts, or
(b)apply to the court.
(3)If it applies to the court, the company must notify the auditor of the application.
(4)If the court is satisfied that the auditor is using the provisions of section 519 to secure needless publicity for defamatory matter—
(a)it shall direct that copies of the statement need not be sent out, and
(b)it may further order the company’s costs (in Scotland, expenses) on the application to be paid in whole or in part by the auditor, even if he is not a party to the application.
The company must within 14 days of the court’s decision send to the persons mentioned in subsection (2)(a) a statement setting out the effect of the order.
(5)If no such direction is made the company must send copies of the statement to the persons mentioned in subsection (2)(a) within 14 days of the court’s decision or, as the case may be, of the discontinuance of the proceedings.
(6)In the event of default in complying with this section an offence is committed by every officer of the company who is in default.
(7)In proceedings for such an offence it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(8)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(1)Unless within 21 days beginning with the day on which he deposited the statement under section 519 the auditor receives notice of an application to the court under section 520, he must within a further seven days send a copy of the statement to the registrar.
(2)If an application to the court is made under section 520 and the auditor subsequently receives notice under subsection (5) of that section, he must within seven days of receiving the notice send a copy of the statement to the registrar.
(3)An auditor who fails to comply with subsection (1) or (2) commits an offence.
(4)In proceedings for such an offence it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(5)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(1)Where—
(a)in the case of a major audit, an auditor ceases for any reason to hold office, or
(b)in the case of an audit that is not a major audit, an auditor ceases to hold office before the end of his term of office,
the auditor ceasing to hold office must notify the appropriate audit authority.
(2)The notice must—
(a)inform the appropriate audit authority that he has ceased to hold office, and
(b)be accompanied by a copy of the statement deposited by him at the company’s registered office in accordance with section 519.
(3)If the statement so deposited is to the effect that he considers that there are no circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the company, the notice must also be accompanied by a statement of the reasons for his ceasing to hold office.
(4)The auditor must comply with this section—
(a)in the case of a major audit, at the same time as he deposits a statement at the company’s registered office in accordance with section 519;
(b)in the case of an audit that is not a major audit, at such time (not being earlier than the time mentioned in paragraph (a)) as the appropriate audit authority may require.
(5)A person ceasing to hold office as auditor who fails to comply with this section commits an offence.
(6)If that person is a firm an offence is committed by—
(a)the firm, and
(b)every officer of the firm who is in default.
(7)In proceedings for an offence under this section it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(8)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(1)Where an auditor ceases to hold office before the end of his term of office, the company must notify the appropriate audit authority.
(2)The notice must—
(a)inform the appropriate audit authority that the auditor has ceased to hold office, and
(b)be accompanied by—
(i)a statement by the company of the reasons for his ceasing to hold office, or
(ii)if the copy of the statement deposited by the auditor at the company’s registered office in accordance with section 519 contains a statement of circumstances in connection with his ceasing to hold office that need to be brought to the attention of members or creditors of the company, a copy of that statement.
(3)The company must give notice under this section not later than 14 days after the date on which the auditor’s statement is deposited at the company’s registered office in accordance with section 519.
(4)If a company fails to comply with this section, an offence is committed by—
(a)the company, and
(b)every officer of the company who is in default.
(5)In proceedings for such an offence it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(6)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(1)The appropriate audit authority on receiving notice under section 522 or 523 of an auditor’s ceasing to hold office—
(a)must inform the accounting authorities, and
(b)may if it thinks fit forward to those authorities a copy of the statement or statements accompanying the notice.
(2)The accounting authorities are—
(a)the Secretary of State, and
(b)any person authorised by the Secretary of State for the purposes of section 456 (revision of defective accounts: persons authorised to apply to court).
(3)If either of the accounting authorities is also the appropriate audit authority it is only necessary to comply with this section as regards any other accounting authority.
(4)If the court has made an order under section 520(4) directing that copies of the statement need not be sent out by the company, sections 460 and 461 (restriction on further disclosure) apply in relation to the copies sent to the accounting authorities as they apply to information obtained under section 459 (power to require documents etc).
(1)In sections 522, 523 and 524 “appropriate audit authority” means—
(a)in the case of a major audit—
(i)the Secretary of State, or
(ii)if the Secretary of State has delegated functions under section 1252 to a body whose functions include receiving the notice in question, that body;
(b)in the case of an audit that is not a major audit, the relevant supervisory body.
“Supervisory body” has the same meaning as in Part 42 (statutory auditors) (see section 1217).
(2)In sections 522 and this section “major audit” means a statutory audit conducted in respect of—
(a)a company any of whose securities have been admitted to the official list (within the meaning of Part 6 of the Financial Services and Markets Act 2000 (c. 8)), or
(b)any other person in whose financial condition there is a major public interest.
(3)In determining whether an audit is a major audit within subsection (2)(b), regard shall be had to any guidance issued by any of the authorities mentioned in subsection (1).
If an auditor ceases to hold office for any reason, any surviving or continuing auditor or auditors may continue to act.