Companies Act 2014 section 401

Resignation of statutory auditor: requisition of general meeting

Section 401 deals with the right of resigning statutory auditors to require the company's directors to convene a general meeting so that the auditors can explain the circumstances of their resignation, and with the obligation on the company to circulate any further written statement the auditors wish to bring to members' attention.

• Resigning auditors whose resignation notice includes a statement of circumstances may require the directors to convene a general meeting to hear the auditors' explanation, with directors having 14 days to arrange the meeting and the meeting taking place within 28 days of the notice being served.
• Where the auditors request the company to circulate a further written statement to members explaining the circumstances of their resignation, the company must mention the existence of that statement in any meeting notice sent to members and send a copy to the Registrar and to all persons entitled to receive statutory financial statements.
• A court may relieve the company of the obligation to circulate the auditors' statement if it is satisfied the auditors are abusing this right to obtain needless publicity for defamatory matter, and may order the auditors to pay the company's costs even if the auditors are not a party to the application.
• Failure by the company or any of its officers — including shadow directors and de facto directors — to comply with the meeting convening or statement circulation requirements is a category 3 offence.