Companies Act 2006

Holding of appropriate qualification

7 (1) This paragraph explains what is meant in paragraph 6(1)(b) by a firm being “controlled by qualified persons”.

(2) In this paragraph references to a person being qualified are—

(a) in relation to an individual, to his holding—

(i) an appropriate qualification, or

(ii) a corresponding qualification to audit accounts under the law of a member State, or part of a member State, other than the United Kingdom;

(b) in relation to a firm, to its—

(i) being eligible for appointment as a statutory auditor, or

(ii) being eligible for a corresponding appointment as an auditor under the law of a member State, or part of a member State, other than the United Kingdom.

(3) A firm is to be treated as controlled by qualified persons if, and only if—

(a) a majority of the members of the firm are qualified persons, and

(b) where the firm’s affairs are managed by a board of directors, committee or other management body, a majority of that body are qualified persons or, if the body consists of two persons only, at least one of them is a qualified person.

(4) A majority of the members of a firm means—

(a) where under the firm’s constitution matters are decided upon by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters;

(b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

(5) A majority of the members of the management body of a firm means—

(a) where matters are decided at meetings of the management body by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters at such meetings;

(b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

(6) Paragraphs 5 to 11 of Schedule 7 to this Act (rights to be taken into account and attribution of rights) apply for the purposes of this paragraph.