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ACCA Applied Skills · Corporate and Business Law (Global) · Other company officers

Brindle Co is a company whose shareholders have just approved a proposal to remove its auditor, Mr Tarn, before his term of office ends. Mr Tarn believes the removal is unfair and wants to put his side to the members. Which of the following is the right Mr Tarn holds under the general company law rules in the Global variant of the syllabus?

An auditor facing removal may have written representations circulated to members and may attend and speak at the meeting. He cannot block the removal or insist on staying in office, and compensation is not automatic, since the members retain the power to remove him.

  1. ATo require the company to circulate his written representations to members and to be heard at the meeting at which his removal is consideredCorrect
  2. BTo remain in office until the end of the financial year regardless of the members' decision
  3. CTo veto the resolution because the auditor's consent is needed for removal
  4. DTo receive compensation equal to his fees for the remainder of the term as of right

Explanation

An auditor facing removal is entitled to receive notice of the resolution, make written representations that the company must circulate, and attend and speak at the meeting. Members can still remove him, so he cannot veto or insist on staying. Compensation is not automatic and depends on contract terms.

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