Annual General Meeting (AGM)
Annual general meeting (AGM) is a compulsory yearly meeting where a company updates its shareholders regarding its financial situation. During this gathering, company officers present financial statements while the shareholders provide a resolution of approval. Furthermore, AGM includes activities such as re-election of the directors, directors’ fees change, and dividend declaration.
The Purpose of an AGM
The objective of an Annual General Meeting (AGM) is to ensure that the company is following compliances such as maintaining financial statements and presenting a new auditor. An AGM also helps to make important decisions regarding the company welfare and updates the shareholders regarding various company activities.
To further elaborate, AGM objectives may be divided into the following types:
Objectives involving Ordinary Business
- To share the audited accounts with members and get approval
- To conduct voting and select the Board of Director members
- To select the auditor(s) for the next fiscal year
- To announce the company’s dividends
Objectives involving Special Business
- To discuss any conflicts or issues raised by the investors
- To protect the investors’ interests
When to hold an AGM?
Under the Companies Act, Cap. 50, every private limited company must hold their AGM within 6 months from the financial year end. You can apply for an extension of time to delay the holding of the AGM, but the maximum extension is 60 days. Thereafter, the company will receive a monetary fine imposed by ACRA for breaching the relevant sections under the Companies Act.
If you are a private company, you can choose to hold offline AGMs. To do so, the company must pass a resolution to stop arranging physical AGMs and have it endorsed by all the shareholders. However, a physical AGM must still be conducted if:
- a new resolution overrules the previous one dispensed with AGMs
- a member requests an AGM within a certain period
- a member requests an AGM within 2 weeks after the financial statements were released
For offline AGM, the corporate secretary must deliver resolutions to all shareholders. If you plan on passing an ordinary resolution, the secretary must send notices to shareholders a minimum of 2 weeks before the meeting date. For special resolution, the shareholders should be notified 3 weeks prior to the event.
Is AGM Attendance Mandatory?
It is obligatory to hold an AGM for shareholders of the company.
Who attends AGMs?
There is a quorum for AGM that all companies must comply with.
Quorum indicates a minimum number of members that must attend the AGM for the discussions and decisions to be considered valid.
For private companies, a minimum of 2 members must be present in the meeting.
For public companies:
- with 1000 members or less, at least 5 members are required to attend the AGM
- with 1001 members to 5000 members, at least 15 members are required to attend the AGM
- with over 5000 members, at least 30 or more members are required to attend the AGM
Proxy Vote at AGM
If a member cannot attend an AGM, they may appoint a proxy attendee. The proxy member may vote on behalf of the member. Note that a member cannot appoint more than 2 proxies for the same meeting.