There are several factors to consider when changing auditors, including whether the auditor is resigning voluntarily, or being removed by the Company. It also need to be taken into consideration whether the current financial period has ended and as such the appointment period has come to an end, or whether the auditor is exiting part way through their appointment year.
If the auditors term of appointment has come to an end and a new auditor is being appointed:
On the basis that the outgoing auditors term of office has now expired, we would need to prepare the shareholder resolution to appoint the new auditor. We would note in the resolution that the outgoing auditor's term has ended and that the Company approves the new appointment. The Company need to send the unexecuted draft to the outgoing and new auditor and provide 14 days notice prior to signing and submitting with ADGM.
However, we note that it is Clara Formation's role as the Company Service Provider to assist with resolution preparation and the filing with ADGM. If you have any doubt over the Company's ability to use the process under section 483 of the Regulations, this should be discussed with your legal advisors.
Our fee for preparing the resolution and filing with ADGM is USD 225 + VAT. If you wish to proceed, please confirm acceptance of our fee and our accounts team will issue our invoice. We will need the full name of the proposed auditor in order to complete the resolution and the appointment letter to complete the filing with ADGM.
Resignation part way through term of office:
An auditor can resign at any time by sending a notice in writing to the company confirming their resignation (section 485). The notice is not effective unless it is accompanied by a statement of the auditor according to section 488. The section 488 statement must state the circumstances connected with the resignation (or state that they do not consider there to be any circumstances in connection with their resignation that needs to be brought to the attention of members or creditors of the company).
Where the resignation letter states circumstances connected to the resignation, then the company must send a copy of the statement to every person entitled to a copy of the accounts. The Auditor has to send the statement to the Registrar and the Company will need to file the resignation with ADGM as well.
Removal of auditor part way through term of office:
Under the ADGM Regulations (s 479 - 482), Auditors can be removed during their term of appointment by a Shareholder resolution passed at a meeting of the Shareholders. A shareholder meeting would need to be held and special notice (one months' notice) of this meeting and the agenda item is required to be given to the shareholders and the Auditor. The Auditor needs to be given the opportunity to make representations to the company and if they do so, these need to be shared with the shareholders.
If the resolution is passed at the shareholder meeting by the requisite shareholders, the minutes approving the removal of the auditor and the appointment of the new auditor would then be filed with ADGM within 14 days of the meeting.
The Directors are also able to pass a resolution to appoint the new Auditors in order to fill a casual vacancy (s 457(3)). Please let us know if your current auditors will provide the necessary documents in order to register this as a resignation and then new appointment or if you will need to go down the route of a shareholder meeting which will require the preparation of an agenda, notice, the holding of a meeting and then the filing of minutes.
We have set out the above to provide you further information regarding the different routes under the Regulations. However, Clara's role here as the Company Service Provider (CSP) is to implement the process as instructed by the Company and we therefore recommend that you discuss any uncertainties with your legal advisors.