When it comes to having a company in Singapore, holding an Annual General Meeting (AGM) is one of the most fundamental compliance requirements that Singapore has to offer. These meetings provide the company’s shareholders with the opportunity to participate in the company’s decision-making process. The primary purpose of this guide is to explain all the steps that you need to take if you want to ensure that your company stays compliant at all times.
Some Things to Keep in Mind
Suppose a private company sends its financial statements to their company secretary within five months from the date of its Financial Year End. In that case, that company is automatically exempted from holding any AGM. However, the following three safeguards are in play here:
- A company member who would like to ask for an AGM to be held should always notify the company to have an AGM no later than the last day of the sixth month of the company’s Financial Year End.
- If any company member asks for an AGM to be held, the company directors must organise one within six months after the company’s Financial Year End.
- If any members or auditors ask for a general meeting to be held, private companies must hold an AGM no later than two weeks after the date on which the financial statements were sent out.
What Is the Main Purpose of Annual General Meeting (AGM)?
The following are the two main reasons why Singapore-based companies choose to hold AGM:
- To present their financial statements
- To seek approval of other business transactions in the company
What Happens During These Meetings?
A company is required to present its financial statements to its shareholders during the Annual General Meeting (AGM). These financial statements should always show a clear picture of the company’s financial performance during the year. Once the financial statements have been presented, its shareholders have to adopt and approve them. As far as privately held companies go, their time limit to present their financial statements to their shareholders is six months from their Financial Year End.
When it comes to the approval of other business transactions in the company, it is one of the activities that take place during an AGM. The following is a list of the business matters that require the shareholders’ approval at the AGM:
- Dividend declaration
- Appointment and retirement of company directors
- Appointment of auditors
- Authorisation to issue shares
Preparing Your Financial Statements
One of the best things that just about any company can do to have a smooth annual return process is to prepare its financial accounts promptly after its Financial Year End. A lot of subsequent steps depend on having these accounts ready. If you want to have your AGM, your financial statements need to be in order. Also, you will need to have already had your AGM if you’re going to file for your annual return. There are some instances in which your financial accounts can remain unaudited.
What to Do If Your Financial Statements Are Not Ready On-Time?
In this case, your corporate secretary has the right to apply for an extension of time on your behalf. So although there are some extra costs in play here, they are pretty insignificant.
What to Do If Your Company Is Dormant?
Whether or not your company is dormant, it is your obligation to have your AGM, as well as to file your annual return. Even dormant companies are expected to convene their AGM either by written means or physically, complete annual return filings with ACRA within their prescribed time limit and prepare their accounts in accordance with Singapore accounting standards (SFRS).
When Should Your Company Hold Its Annual General Meeting (AGM)?
Singapore-based companies are required to hold their first AGM within 18 months from the date on which they were incorporated. From that point on, companies have to keep an AGM every year, and the period between two AGMs should never exceed 15 months.
Extensions and Penalties
If a company is not able to hold its Annual General Meeting (AGM) on time, the corporate secretary can file for an extension of time of up to a maximum of two months with ACRA. Also, if a company does not meet its deadlines when it comes to holding its AGM or if the accounts laid out at the AGM have not been updated, both the company in question and its directors are subject to some financial penalties. Failing to get your annual return on time could result in the same thing.
What Is the Next Step?
If you need someone to lend you a helping hand when it comes to this kind of thing, our team of professionals here at HeySara would be more than happy to help you out. Feel free to get in touch with us anytime you see fit!