Auditors’ Appointment and Remuneration

Section 159 of the companies Act Cap 486 states:
(1) Every company shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that, until the conclusion of the next, annual general meeting.
(2) Notwithstanding the provisions of subsection (1), at any annual general meeting a retiring auditor, however appointed, shall be deemed to be reappointed without any resolution being passed unless –

  • he is not qualified for reappointment; or
  • a resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed; or
  • he has given the company notice in writing of his unwillingness to be reappointed: Provided that where notice is given of an intended resolution to appoint some person or persons in place of a retiring auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with, the retiring auditor shall not be deemed to be automatically reappointed by virtue of this subsection.

(3) Where at an annual general meeting no auditors are appointed or are deemed to be reappointed, the registrar may appoint a person to fill the vacancy.
(4) The company shall, within seven days of the registrar’s power under subsection (3) becoming exercisable, give him notice of that fact, and, if a company fails to give notice as required by this subsection, the company and every officer of the company who is in default shall be liable to a default fine.
(5) Subject as hereinafter provided, the first auditors of a company may be appointed by the directors at any time before the first annual general meeting, and auditors so appointed shall hold office until the conclusion of that meeting: Provided that–

  •  the company may at a general meeting remove any such auditors and appoint in their place any other persons who have been nominated for appointment by any member of the company and of whose nomination notice has been given to the members of the company not less than fourteen
    days before the date of the meeting; and
  • if the directors fail to exercise their powers under this subsection, the company in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease.

(6) The directors may fill any casual vacancy in the office of auditor, but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act.
(7) (a) The remuneration of the auditors of a company–

  • in the case of an auditor appointed by the directors or by the registrar may be fixed by the directors or by the registrar as the case may be;
  • subject to subparagraph (i), shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine.
    (b) For the purposes of this subsection, any sums paid by the company in respect of the auditors’ expenses shall be deemed to be included in the expression “remuneration” Section 159 of the Companies’ Act cap 486 states clearly that the following should be done:
  •  appoint an auditor during the company must annual general meeting
  • a retiring auditor who happens to be re – appointed is duly appointed
  • the registrar of companies have power to appoint an auditor if the company fails to appoint one during their annual general meeting
  • the must notify the registrar of companies within seven days that they were unable to appoint an auditor, failure to which the company and any officer who failed is liable to a default fine
  • the first auditors of the company may be appointed by the directors of company before the first AGM
  • the remuneration of the auditors will be fixed by whoever appoints him or her
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