(1)When an election is in force under section 386 (election by private company to dispense with annual appointment), any member of the company may deposit notice in writing at the company’s registered office proposing that the appointment of the company’s auditors be brought to an end.
No member may deposit more than one such notice in any financial year of the company.
(2)If such a notice is deposited it is the duty of the directors—
(a)to convene a general meeting of the company for a date not more than 28 days after the date on which the notice was given, and
(b)to propose at the meeting a resolution in a form enabling the company to decide whether the appointment of the company’s auditors should be brought to an end.
(3)If the decision of the company at the meeting is that the appointment of the auditors should be brought to an end, the auditors shall not be deemed to be re-appointed when next they would be and, if the notice was deposited within the period immediately following the distribution of accounts, any deemed reappointment for the financial year following that to which those accounts relate which has already occurred shall cease to have effect.
The period immediately following the distribution of accounts means the period beginning with the day on which copies of the company’s annual accounts are sent to members of the company under section 238 and ending 14 days after that day.
(4)If the directors do not within 14 days from the date of the deposit of the notice proceed duly to convene a meeting, the member who deposited the notice (or, if there was more than one, any of them) may himself convene the meeting; but any meeting so convened shall not be held after the expiration of three months from that date.
(5)A meeting convened under this section by a member shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by directors.
(6)Any reasonable expenses incurred by a member by reason of the failure of the directors duly to convene a meeting shall be made good to him by the company; and any such sums shall be recouped by the company from such of the directors as were in default out of any sums payable, or to become payable, by the company by way of fees or other remuneration in respect of their services.
(7)This section has effect notwithstanding anything in any agreement between the company and its auditors; and no compensation or damages shall be payable by reason of the auditors’ appointment being terminated under this section.]
Textual Amendments
F1New ss. 391–393 inserted (subject to the savings and transitional provisions in S.I. 1990/355, arts. 4, 10, Sch. 4) by Companies Act 1989 (c. 40, SIF 27), ss. 118, 122 as part of the text inserted to replace Chapter V of Part XI (as mentioned in s. 118 of the 1989 Act)
Modifications etc. (not altering text)
C1Ss. 391–393 applied with modifications by S.I. 1985/680, regs. 4–6, Sch.