> Co-operatives  > Departure of auditors  > Removal of auditors

Removal of Auditors
Under s329(1) of the Corporations Act, an auditor of a co-operative may only be removed by resolution of the co-operative at a general meeting of which notice under s329(1A) has been given, but not otherwise. The resolution required to remove an auditor is an ordinary resolution which must be passed by a simple majority of those voting in person at the meeting, or by proxy if applicable.

Section 329(1A) of the Corporations Act provides that notice of intention to move the resolution must be given to the co-operative at least two months before the meeting is to be held. However, if the co-operative calls a meeting after the notice of intention is given, the meeting may pass the resolution even though the meeting is held less than two months after the notice of intention is given.

A notice should be served on the co-operative secretary as representative of the co-operative by a person who is normally authorised to convene meetings. This is usually a director.

The Act provides for certain situations where members can convene a meeting. Where members can convene a meeting, they are also able to serve the notice. The circumstances of a meeting requisitionable by members are described at s204 of the Act.

The form of notice is not prescribed by the Act. However, an example of a notice may be:

'I, intend (or request the co-operative) to convene a general meeting of the co-operative on at least two months after service) to consider, and if thought fit pass, the resolution: that (name of existing auditor) be removed as auditor of the co-operative signed and dated.'

Under s329(2) of the Corporations Act the co-operative shall, as soon as possible, send a copy of the notice under s329(1A) to the auditor and lodge a copy with CBS.

Within seven days of receiving a copy of the notice, the auditor may make representations in writing to the co-operative and request that a copy of the representations be sent by the co-operative (at its expense) to every member to whom notice of the meeting is sent [s329(3)].

Unless CBS on the application of the co-operative otherwise orders, the co-operative must send a copy of the representations in accordance with the auditors request. The auditor may require that the representations be read out at the meeting and has the right to be heard at the meeting [s329(4)].

The co-operative must give persons entitled to notice of the general meeting notice of the nomination of the new auditor.

If the resolution is carried - Within 14 days of removing the auditor from office, the co-operative must lodge with CBS notice of the removal of the auditor (Form 24) Where there is a trustee for the holders of debentures of the co-operative, the co-operative must give to the trustee a copy of the notice lodged with CBS [s329(11)].

New auditor must be appointed - Where the auditor is removed in accordance with s329 of the Corporations Act, the co-operative may without adjourning the general meeting at which the auditor was removed, appoint a new auditor by a resolution passed by a majority of not less than three quarters of those entitled to vote in person, or by proxy if applicable [s327(10)].

Notice of nomination of an auditor shall be sent by the co-operative to each auditor nominated, the existing auditor of the co-operative and to each person entitled to receive notice of a general meeting, not less than seven days before the meeting or at the time notice of the meeting is given [s328(3)].

If the resolution to appoint a new auditor is not passed or could not be passed because notice of the nomination of the auditor has not been sent, the meeting may be adjourned to a day between 20 and 30 days after the first meeting.

Nominations for appointment as auditor at the adjourned meeting must be received at least 14 days before the meeting and must be from a member. The resolution appointing an auditor at the adjourned meeting is by ordinary resolution [s327(10)(b)].

Where the co-operative fails to appoint a replacement auditor, the co-operative shall notify CBSwithin seven days [s327(11)].

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