Peter and Paul are good friends, who started a business by incorporating PP Limited (“PP”), a private limited company in Hong Kong on 1 April 2019. Peter and Paul hold 7,000 shares and 3,000 shares of PP respectively.
Peter lives in Hong Kong. Paul is a Singaporean and, for most of the time, he stays in Singapore where he has his own business. Although both of them are directors of PP, the operation of PP is mainly run by Peter in Hong Kong. Peter is also the company secretary of PP.
Chu & Chan is the auditing firm for PP. Mr Chu is a partner in Chu & Chan and is the best friend of Paul. Pauline is the finance manager of PP and she has had an argument with Mr Chu over PP’s audit fee. Pauline asked Chu & Chan to resign, but Mr Chu wants to talk to Paul about the issue of the audit fee.
Pauline has proposed to Peter that Chu & Chan should be removed. Peter discussed Pauline’s suggestion to remove Chu & Chan with Paul. Paul told Peter that there was no provision in PP’s articles of association for the removal of an auditor, and so Chu & Chan could not be removed.
Peter is unhappy with Paul’s reply and thinks that Paul is not contributing to the business operation. Peter wants to remove Paul as a director of PP and alter the minimum number of directors in PP’s articles of association from two to one within one week.

a Advise Peter whether he can remove Chu & Chan and the rights/duties of Chu & Chan in relation to the removal.
b Advise Peter on the statutory requirement for passing members’ resolution(s) in the form of a written resolution.
c Critically analyse whether Paul may be removed as a director of PP, and whether PP’s articles of association may be altered within one week.

d Discuss whether Peter can continue to be PP’s company secretary if Paul is removed from the board of PP.

Answer rating: 100% (QA)

a Peter cannot unilaterally remove Chu Chan as the auditor of PP The removal of auditors typically r... View the full answer