Company Law Reform Bill [HL]

moved Amendment No. 304:"Leave out Clause 475." The noble Lord said: My Lords, in moving Amendment No. 304, I shall speak also to Amendments Nos. 305 to 311 and 502. These are technical amendments to clarify the way in which companies, private and public, are to appoint their auditors. In particular, they now explicitly provide for the method of appointment of a company’s first auditors. The need for some improvement was clear from our debates in Grand Committee and I am grateful to the noble Lords who then put forward probing amendments demonstrating this. The lack of any explanation of how a company was to appoint its first auditor was unhelpful and we have now remedied this. We have also taken the opportunity to recast the rules so that the basic requirement is that a company appoints an auditor in relation to each financial year for which its accounts will have to be audited, followed by specific provisions about the time by which the auditor must be appointed and about the times when appointment is to be by the directors and the members. In particular, it is now clear from subsection (3)(a) in Amendment No. 305 that it is for the directors of a private company to appoint first auditors by the time that they send out the company’s first set of accounts, and from subsection (3)(a) in Amendment No. 309 that it is for the directors of a public company to appoint first auditors before the company’s first accounts meeting. It is also now clear from the final sentence of subsection (5) in Amendment No. 305 that appointment of private company auditors is without prejudice to deemed reappointment. I hope that noble Lords will agree that the new provisions are easier to follow than those they replace. I beg to move. On Question, amendment agreed to.