APPOINTMENT OF AUDITORS, BANKERS AND OTHERS
Auditors | Certain small companies (including small charitable companies) and certain dormant companies are entitled to an exemption from the obligation to appoint an auditor or auditors - section 388A(1) of the Companies Act 1985. Otherwise, every company is required to appoint an auditor or auditors - section 384(1) of the Companies Act 1985. These two exemptions are discussed further in the last paragraph of this section on auditors.
Except in the case of a private company which has elected to dispense with the laying of accounts, auditors are required to be appointed at each general meeting at which accounts are laid to hold office from the conclusion of that meeting until the conclusion of the next general meeting at which accounts are laid - section 384(2) of the Companies Act 1985. However, the first auditors may be appointed by the directors before the first general meeting at which accounts are laid, or (failing action by the directors) by the company in general meeting - section 385 of the Companies Act 1985.
Where a private company has elected pursuant to section 252 of the Companies Act 1985 to dispense with the laying of accounts, auditors must be appointed by the company at a general meeting held within 28 days of accounts for the previous financial year being sent to members under 238 of the Companies Act 1985; or, where notice has been given by a shareholder or auditor (under section 253(2) of the Companies Act 1985) requiring the laying of accounts before a general meeting, then by the conclusion of that meeting. Auditors so appointed hold office from the end of the 28 day period or, as the case may be, the conclusion of the meeting, until the end of the time for appointing auditors for the next financial year - section 3885A(2) of the Companies Act 1985. In the case of the first auditors of a private company which has made an election under section 252, the directors can exercise the power of appointment, failing which the company in general meeting may make the appointment - section 385A(4).
A private company may, by elective resolution under section 379A of the Companies Act 1985, elect to dispense with the obligation to appoint auditors annually, in which case the existing auditors will, so long as the election continues in force, be deemed to have been re-appointed unless the company is a dormant company or a resolution is passed ending the appointment - section 386 of the Companies Act 1985.
In a case where no auditors are appointed, a company shall within one week of the end of the time for such appointment lapsing, give notice to the Secretary of State so that the Secretary of State can fill the vacancy - section 387 of the Companies Act 1985. Failure to give such notice makes the defaulting company and its officers guilty of an offence and liable to a fine, and for continued contravention, a daily default fine - section 387 Companies Act 1985.
Details of the circumstances in which an exemption applies from the obligation to appoint auditors in the case of certain small companies (including small charitable companies) and certain dormant companies are set out in the Companies House publication entitled 'Accounts and Accounting Reference Dates' particularly Chapters 4 and 5.
| | Bankers | The opening of a bank account (or accounts) and the authorisation of account signatories is often attended to at the first meeting of the directors after the company is formed. Banks frequently have their own standard form of documentation which, if used when opening a bank account, ensures that the appropriate board resolutions are passed to approve the opening of the account. These standard documents also normally include a bank mandate and provision for specimen signatures of the authorised signatories. The minutes of the relevant directors' meeting will usually record the appointment of the bank concerned, and then either incorporate the wording suggested by the bank or refer to the bank's standard documents in order to deal with the formalities of opening the account.
Following is a sample of the resolutions which may be used:
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 | It was resolved that a bank account for the company be opened with [ ] Bank at the bank's branch located at [ ];
| | It was resolved the bank account opening forms be duly completed and that resolutions in the standard form required by the bank (a copy of which was produced to the meeting and was approved and a further copy of which is annexed to these minutes) be and are hereby passed;
| | The company secretary was requested to forward the bank account opening forms and a copy of these resolutions to the bank including specimen signatures of each of the signatories to the account.
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In addition to a copy of the board minutes, the bank may also require the original certificate of incorporation (or a certified copy of it); any original certificate(s) of incorporation on change of name (or a certified copy) if the company has changed its name, and a certified copy of the current memorandum and articles of association.
| | Others | |
It may be convenient at the time of holding the first meeting of directors to appoint other professionals / advisers etc., such as lawyers, insurers, tax agents etc. Passing such a resolution has the potential advantage that the directors (if more than one) will all have some input into those important choices, rather than the choice possibly being made later (e.g. by one director or by management) without input from all of the directors. |
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