• 26. 26. Appointment of Auditors

    Sections 457 to 460 and 464 to 466 apply to LLPs, modified so that they read as follows —

    • 457. Appointment of auditors of LLPs: general

      (1) An auditor or auditors of an LLP must be appointed for each financial year of the LLP, unless the members reasonably resolve otherwise on the ground that audited accounts are unlikely to be required.
      (2) For each financial year for which an auditor or auditors is or are to be appointed (other than the LLP's first financial year), the appointment must be made before the end of the period of 28 days beginning with —
      (a) the end of the time allowed for sending out copies of the LLP's annual accounts and reports for the previous financial year (see section 405 (duty to circulate copies of annual accounts and auditor's report)), or
      (b) if earlier, the day on which copies of the LLP's annual accounts and reports for the previous financial year are sent out under section 405 (duty to circulate copies of annual accounts and auditor's report).
      This is the "period for appointing auditors".
      (3) The members may appoint an auditor or auditors of the LLP —
      (a) at any time before the LLP's first period for appointing auditors,
      (b) following a period during which the LLP (being exempt from audit) did not have any auditor, at any time before the LLP's next period for appointing auditors, or
      (c) to fill a casual vacancy in the office of auditor.
      (4) The members may appoint an auditor or auditors —
      (a) during a period for appointing auditors,
      (b) if the LLP should have appointed an auditor or auditors during a period for appointing auditors but failed to do so, or
      (c) where the members had power to appoint under subsection (3) but have failed to make an appointment.
      (5) An auditor or auditors of an LLP may only be appointed —
      (a) in accordance with this section,
      (b) in accordance with section 458 (default power of Registrar), or
      This is without prejudice to any deemed re-appointment under section 459 (term of office of auditors of LLPs).

    • 458. Appointment of auditors of LLPs: default power of Registrar

      (1) If an LLP fails to appoint an auditor or auditors in accordance with section 457 (appointment of auditors of LLPs: general), the Registrar may appoint one or more persons to fill the vacancy.
      (2) Where subsection (2) of that section applies and the LLP fails to make the necessary appointment before the end of the period for appointing auditors, the LLP must within one week of the end of that period give notice to the Registrar of its power having become exercisable.
      (3) If an LLP fails to give the notice required by this section, a contravention of the Companies Regulations is committed by —
      (a) the LLP, and
      (b) every designated member of the LLP who is in default.
      (4) A person who commits the contravention referred to in subsection (3) shall be liable to a level 3 fine.

    • 459. Term of office of auditors of LLPs

      (1) An auditor or auditors of an LLP hold office in accordance with the terms of their appointment, subject to the requirements that —
      (a) they do not take office until any previous auditor or auditors cease to hold office, and
      (b) they cease to hold office at the end of the next period for appointing auditors unless re-appointed.
      (2) Where no auditor has been appointed by the end of the next period for appointing auditors, any auditor in office immediately before that time is deemed to be re-appointed at that time, unless —
      (a) the LLP agreement requires actual re-appointment, or
      (b) the deemed re-appointment is prevented by the members under section 460 (prevention by members of deemed re-appointment of auditor), or
      (c) the members have determined that he should not be re-appointed, or
      (d) the members have determined that no auditor or auditors should be appointed for the financial year in question.
      (3) This is without prejudice to the provisions of this Part as to removal and resignation of auditors.
      (4) No account shall be taken of any loss of the opportunity of deemed reappointment under this section in ascertaining the amount of any compensation or damages payable to an auditor on his ceasing to hold office for any reason.

    • 460. Prevention by members of deemed re-appointment of auditor

      (1) An auditor of an LLP is not deemed to be re-appointed under section 459(2) if the LLP has received notices under this section from members representing at least the requisite percentage of the total voting rights in the LLP that the auditor should not be re-appointed.
      (2) The "requisite percentage" is 5%, or such lower percentage as is specified for this purpose in the LLP agreement.
      (3) A notice under this section —
      (a) may be in hard copy or electronic form,
      (b) must be authenticated by the person or persons giving it, and
      (c) must be received by the LLP before the end of the accounting reference period immediately."

    • 464. Fixing of auditor's remuneration

      (1) The remuneration of an auditor appointed by the members of an LLP must be fixed by the members or in such manner as the members may determine.
      (2) The remuneration of an auditor appointed by the Registrar must be fixed by the Registrar.
      (3) For the purposes of this section "remuneration" includes sums paid in respect of expenses.
      (4) This section applies in relation to benefits in kind as to payments of money.

    • 465. Disclosure of terms of audit appointment

      (1) The Board may make rules for securing the disclosure of the terms on which an LLP's auditor is appointed, remunerated or performs his duties.

      Nothing in the following provisions of this section affects the generality of this power.
      (2) The rules may —
      (a) require disclosure of —
      (i) a copy of any terms that are in writing, and
      (ii) a written memorandum setting out any terms that are not in writing,
      (b) require disclosure to be at such times, in such places and by such means as are specified in the rules,
      (c) require the place and means of disclosure to be stated —
      (i) in a note to the LLP's annual accounts (in the case of its individual accounts) or in such manner as is specified in the rules (in the case of group accounts), or
      (ii) in the auditor's report on the LLP's annual accounts.
      (3) The provisions of this section apply to a variation of the terms mentioned in subsection (1) as they apply to the original terms.

    • 466. Disclosure of services provided by auditor or associates and related remuneration

      (1) The Board may make rules for securing the disclosure of —
      (a) the nature of any services provided for an LLP by the LLP's auditor (whether in his capacity as auditor or otherwise) or by his associates,
      (b) the amount of any remuneration received or receivable by an LLP's auditor, or his associates, in respect of any such services.
      Nothing in the following provisions of this section affects the generality of this power.
      (2) The rules may provide —
      (a) for disclosure of the nature of any services provided to be made by reference to any class or description of services specified in the rules (or any combination of services, however described),
      (b) for the disclosure of amounts of remuneration received or receivable in respect of services of any class or description specified in the rules (or any combination of services, however described),
      (c) for the disclosure of separate amounts so received or receivable by the LLP's auditor or any of his associates, or of aggregate amounts so received or receivable by all or any of those persons.
      (3) The rules may —
      (a) provide that "remuneration" includes sums paid in respect of expenses,
      (b) apply to benefits in kind as well as to payments of money, and require the disclosure of the nature of any such benefits and their estimated money value,
      (c) apply to services provided for associates of an LLP as well as to those provided for an LLP,
      (d) define "associate" in relation to an auditor and a company respectively.
      (4) The rules may provide that any disclosure required by the rules is to be made —
      (a) in a note to the LLP's annual accounts (in the case of its individual accounts) or in such manner as is specified in the rules (in the case of group accounts), or
      (b) in the auditor's report on the LLP's annual accounts.
      (5) If the rules provide that any such disclosure is to be made as mentioned in subsection (4)(a) the rules may require the auditor to supply the members of the LLP with any information necessary to enable the disclosure to be made.