Removal of Auditors
The company may remove an auditor from office, but this can only be done by ordinary resolution either passed at a general meeting or by written resolution of the shareholders. Special notice of the resolution is required and so in basic terms if written resolutions are used the company must send a copy of the proposed resolution to the auditors. The outgoing auditors are entitled, within 14 days of receipt, to require the company to circulate written representations and the company must circulate these to the members with the written resolution. If the resolution is to be proposed at a general meeting the 'special notice' requires notice of the resolution to be given to the company at least 28 days before the meeting at which it is to be proposed.
The statutory provision does not deprive the auditors from any entitlement to damages in respect of the termination of the auditor's appointment.
Where a resolution is passed to remove an auditor from office the company must give notice of that fact to the Registrar within 14 days. It is an offence to fail to comply (CA 2006, s 502).