Sch 10 para 7
(1) This paragraph explains what is meant in paragraph 6(1)(b) by a firm being “controlled by qualified persons”. (2) In this paragraph references to a person being qualified are— (a) in relation to an individual, to that individual's— (i) holding an appropriate qualification, or (ii) being a third country auditor and meeting the requirements of paragraph 6(1)(aa)(ii) or 6(1A); (b) in relation to a firm, to its— (i) being eligible for appointment as a statutory auditor, ... (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) A firm is to be treated as controlled by qualified persons if, and only if— (a) a majority of the members of the firm are qualified persons, and (b) where the firm's affairs are managed by a board of directors, committee or other management body, a majority of that body are qualified persons or, if the body consists of two persons only, at least one of them is a qualified person. (4) A majority of the members of a firm means— (a) where under the firm's constitution matters are decided upon by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters; (b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution. (5) A majority of the members of the management body of a firm means— (a) where matters are decided at meetings of the management body by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters at such meetings; (b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution. (6) Paragraphs 5 to 11 of Schedule 7 to this Act (rights to be taken into account and attribution of rights) apply for the purposes of this paragraph.