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Section 743 of The Companies Act No. 17 of 2015: Failure to re-appoint auditor: special procedure required for written resolution

    

(1) In this section, “outgoing auditor”, in relation to a private company, means the auditor of the company whose term of office ended, or is to end, at the end of the period for appointing auditors.
(2) This section applies if a resolution is proposed as a written resolution of a private company the effect of which would be to appoint a person as auditor in place of the outgoing.
(3) This section applies only if—
(a) the period for appointing auditors has not ended since the outgoing auditor ceased to hold office; or
(b) such a period has ended and an auditor should have been appointed but was not.
(4) The company shall send a copy of the proposed resolution to the person proposed to be appointed and to the outgoing auditor.
(5) Within fourteen days after receiving notice of the proposed resolution, the outgoing auditor may—
(a) make written representations with respect to the proposed resolution, not exceeding two thousand words; and
(b) request the company to circulate the representations to the company's members.
(6) The company shall circulate the representations together with the copy or copies of the resolution circulated in accordance with section 265 or 267, except that the period allowed under section 267(4) for serving copies of the proposed resolution is twenty-eight days instead of twenty-one days.
(7) If a company fails to comply with subsection (4) or (6), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.
(8) If the company or a person affected claims that the representations made by the auditor contain defamatory matter, the company or person may apply to the Court for an order under subsection (9). The auditor is entitled to be served with a copy of such an application and to be heard at the hearing of the application by the Court.
(9) On the hearing of such an application, the Court shall, if satisfied that the representations of the auditor contain defamatory matter, make an order that the representations need not be circulated to the company's members, but if not so satisfied, it shall dismiss the application.
(10) If the Court has made an order under subsection (9), copies of the auditor's representations need not be circulated to the company's members.
(11) If a requirement of this section is not complied with, the resolution is void.

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Disclaimer: This document is not to be taken as legal advise.

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