Chapter: 32  COMPANIES ORDINANCE

Section Num: 131    Version Date 30/06/1997

Appointment and removal of auditors

(1) Every company shall at each annual general meeting of the company appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting of the company.

(2) Where at an annual general meeting of a company no auditors are appointed or reappointed, the court may, on the application of any member of the company, appoint a person to fill the vacancy.

(3) The first auditors of a company may be appointed by the directors at any time before the first annual general meeting of the company, and auditors so appointed shall hold office until the conclusion of that meeting.

(4) If the directors fail to exercise their powers under subsection (3), those powers may be exercised by the company in general meeting.

(5) The directors, or the company in general meeting, may fill any casual vacancy in the office of auditor, but while any such vacancy continues, the surviving or continuing auditor or auditors, if any, may act.

(6) A company may by ordinary resolution remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him; and, except in the case of a private company, where a resolution removing an auditor is passed at a general meeting of a company, the company shall within 14 days give notice of that fact in the specified form to the Registrar.  (Amended 3 of 1997 s. 35)

(7) If a company fails to give notice as required by subsection (6), the company and every officer of the company who is in default shall be guilty of an offence and liable to a fine and, for continued default, to a daily default fine.  (Amended 7 of 1990 s. 2)

(8) The remuneration of the auditor of a company-

(a) in the case of an auditor appointed by the directors or by the court, may be fixed by the directors or by the court, as the case may be;

(b) subject to paragraph (a), shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine.

For the purpose of this subsection "remuneration" includes any sums paid by the company in respect of the auditor's expenses.

(9) The appointment of a firm by its firm name to be the auditors of a company shall be deemed to be an appointment of those persons who shall from time to time during the currency of the appointment be the partners in that firm as from time to time constituted and who are qualified for appointment as auditors of that company:

Provided that any such appointment shall lapse, and thereby create a casual vacancy in the office of auditor, if all those persons who were partners in the firm and qualified as aforesaid at the date of the appointment cease to be partners or so qualified before the period of the appointment expires.

(10) Nothing in subsection (6) shall be taken as depriving a person removed thereunder of compensation or damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor.

(11) Where a company's auditor or auditors are holding office at the date of commencement* of the Companies (Amendment) Ordinance 1984 (6 of 1984), nothing in this section as amended by that Ordinance shall be taken as terminating their appointment, or as requiring either their reappointment or the appointment of other auditors, before the conclusion of the annual general meeting of the company held next after that date.

(Replaced 6 of 1984 s. 92)

[cf. 1976 c. 69 s. 14 U.K.]

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Note:

* Commencement date: 31 August 1984.