Section 277: Special notice required for resolution to remove auditor
1. Special notice is required
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A resolution to remove the company’s auditor can only be moved at a general meeting if a special notice has been given.
- This means: members who want to remove the auditor must give at least 28 days’ notice to the company before the meeting where the resolution will be voted.
- This is required by Section 277(1) CA 2016. Kaizen CPA+1
2. Company must notify auditor and Registrar
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Once the company receives that special notice from the member(s), the company must immediately send a copy of the notice to:
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the auditor who is proposed to be removed, and
- the Registrar (SSM).
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This is required by Section 277(2) CA 2016. SSM+2Kaizen CPA+2
3. Auditor has the right to defend themselves in writing
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The auditor who is facing removal may, within 7 days of receiving the notice, prepare a written representation (a written explanation/defence)
- The auditor may also request that the company circulates this written representation to every member before the meeting where the removal will be discussed
- This right is given under Section 277(3) CA 2016. Kaizen CPA+1
4. Auditor can insist members hear the explanation
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If the company does not or cannot circulate the auditor’s written representation, the auditor can require that the representation be read out at the general meeting where the resolution to remove them will be considered
- This is provided under Section 277(4)–(5) CA 2016. Kaizen CPA+1
How to answer in exam (short paragraph):
Section 277 CA 2016 says that to remove an auditor, members must give a special notice (at least 28 days). The company must immediately send a copy of that notice to the auditor and to the Registrar. The auditor then has the right to send a written representation within 7 days and ask for it to be circulated to all members, or read out at the meeting, so the members hear the auditor’s side before voting. Kaizen CPA+1
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