Companies (Amendment) (No. 2) Act, 1999

Removal of auditor consequent on exemption being availed of.

34.—(1) If a company—

(a) decides that the appointment of a person as auditor to the company should not be continued during the whole or part of a financial year in which the exemption is being availed of in relation to the company, and

(b) decides, accordingly, to terminate the appointment of that person as auditor to the company,


(i) that person shall, within the period of 21 days beginning on the date of his or her being notified by the company of that decision, serve a notice on the company containing the statement referred to in subsection (2),

(ii) unless and until that person serves such a notice, any purported termination of his or her appointment as auditor to the company shall not have effect.

(2) The statement to be contained in a notice under subsection (1)(i) shall be whichever of the following is appropriate, namely—

(a) a statement to the effect that there are no circumstances connected with the decision of the company referred to in subsection (1) that he or she considers should be brought to the notice of the members or creditors of the company, or

(b) a statement of any such circumstances as aforesaid.

(3) Where a notice under subsection (1)(i) is served on a company—

(a) the auditor concerned shall, within 14 days after the date of such service, send a copy of the notice to the registrar of companies, and

(b) subject to subsection (4), the company shall, if the notice contains a statement referred to in subsection (2)(b), within 14 days after the date of such service, send a copy of the notice to every person who is entitled under section 159(1) of the Principal Act to be sent copies of the documents referred to in the said section 159(1).

(4) Copies of a notice served on a company under subsection (1) need not be sent to the persons specified in subsection (3)(b), if, on the application of the company concerned or any other person who claims to be aggrieved, the court is satisfied that the notice contains material which has been included to secure needless publicity for defamatory matter and the court may order the company's costs on an application under this subsection to be paid in whole or in part by the auditor concerned notwithstanding that he or she is not a party to the application.

(5) Subsection (2A) (inserted by the Companies Act, 1990 ) of section 161 of the Principal Act shall not apply to an auditor as respects his or her removal from office in the circumstances referred to in subsection (1).