C2Part 16Audit
Chapter 6Auditors' liability
Liability limitation agreements
C1536Authorisation of agreement by members of the company
1
A liability limitation agreement is authorised by the members of the company if it has been authorised under this section and that authorisation has not been withdrawn.
2
A liability limitation agreement between a private company and its auditor may be authorised—
a
by the company passing a resolution, before it enters into the agreement, waiving the need for approval,
b
by the company passing a resolution, before it enters into the agreement, approving the agreement's principal terms, or
c
by the company passing a resolution, after it enters into the agreement, approving the agreement.
3
A liability limitation agreement between a public company and its auditor may be authorised—
a
by the company passing a resolution in general meeting, before it enters into the agreement, approving the agreement's principal terms, or
b
by the company passing a resolution in general meeting, after it enters into the agreement, approving the agreement.
4
The “principal terms” of an agreement are terms specifying, or relevant to the determination of—
a
the kind (or kinds) of acts or omissions covered,
b
the financial year to which the agreement relates, or
c
the limit to which the auditor's liability is subject.
5
Authorisation under this section may be withdrawn by the company passing an ordinary resolution to that effect—
a
at any time before the company enters into the agreement, or
b
if the company has already entered into the agreement, before the beginning of the financial year to which the agreement relates.
Paragraph (b) has effect notwithstanding anything in the agreement.
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2