514Failure to re-appoint auditor: special procedure required for written resolution
(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.