An annual general meeting (AGM) is a mandatory yearly gathering of a company’s shareholders who hold vested interest in the organization. This article delves into the significance of AGMs and provides insights into their necessity and conduct. Gain a comprehensive understanding of AGMs in Singapore as we address the questions surrounding them.
Overview: Why Does a Company Need to Hold an AGM?
AGMs serve as a crucial medium through which companies disseminate vital information to their stakeholders. These meetings encompass discussions on financial reports, audits, and other pertinent matters. By providing verified information, AGMs empower stakeholders to make well-informed decisions. Moreover, holding AGMs ensures compliance with legal requirements, including the presentation and approval of audited accounts and other outstanding issues. Directors’ compensation, updates on future activities, and addressing stakeholders’ concerns are among the key areas often covered during these meetings. During the AGM, the organization’s chairperson presides over the proceedings, presenting an overall status report of the company. Members are encouraged to attend AGMs after reviewing the previous and current annual reports, enabling them to engage in informed discussions about critical emerging issues. When properly executed by all attendees and organizers, AGMs yield substantial benefits for both the company and its employees.
Is AGM Compulsory?
Yes, the annual general meeting is mandatory for all stakeholders and company executives. AGMs are held to discuss various important matters, including company account reviews, audited accounts, elections, and fiscal records of the preceding year. According to the Companies Act, every company in Singapore must conduct an annual general meeting at least once a year, with no more than 15 months between two consecutive AGMs.
Dispensing with AGMs
Under certain circumstances, companies can be exempted from holding AGMs by following specific procedures. Private companies can request exemption from AGMs if they distribute their financial statements to members within five months after the end of the financial year. This exemption was implemented in August 2018. The AGM exemption is subject to the following safeguards: A member must notify the company no later than fourteen days before the end of the sixth month following the financial year-end if they wish to request an AGM. If a member of the company notifies the directors, they must hold an AGM within six months after the financial year-end. The company may seek an extension of time to hold the AGM from the Registrar, as long as it is before the end of the six-month period. Private companies must hold a general meeting to present financial statements if any member or auditor requires it within 14 days after the financial statements are sent out. Directors have to arrange a general meeting within 14 days after the request to present the financial statements. Private dormant relevant companies, which are exempt from preparing financial statements, are not required to hold AGMs, provided they adhere to the aforementioned safeguards.
When Should You Hold an AGM?
The following table explains the timeline for holding AGMs based on the financial year-end (FYE) date:
| For Companies with FYE ending before 31 Aug | For Companies with FYE ending on or after 31 Aug |
|---|---|
| Timeline 1: Hold the first AGM within 18 months of incorporation, and subsequent AGMs yearly at intervals of not more than 15 months | Timeline 2: Financial statements tabled at AGM must be made up to a date within 4 months (for listed companies) or 6 months (for any other company) before the AGM date. |
| Hold AGM within 4 months after FYE for listed companies | Hold AGM within 6 months after FYE for any other company |
How Do You Hold an AGM?
During an AGM, the company presents its financial statements to members and addresses any inquiries related to the business. The meeting is conducted under the guidance of the chairman, typically the chairperson of the board of directors. If the company’s rules do not specify a chairman for the meeting, any member can be elected as the chairman during the AGM. The company secretary or an appointed secretarial service is responsible for preparing the necessary documentation for the AGM. Important aspects to consider when holding an AGM include:
- Limiting discussions to resolutions for which AGM notices have been given.
- Ensuring the meeting meets the required quorum.
- Proper appointment of proxies, if applicable.
- Providing all necessary documentation, such as financial statements, balance sheets, the director’s report, and the auditor’s report (if applicable).
- Ensuring proper voting on various resolutions.
- Recording the minutes of the meeting in writing and having them signed by the appointed chairman.
Wrap Up
Now equipped with comprehensive knowledge on holding annual general meetings (AGMs) in Singapore, you can confidently make informed decisions regarding AGMs in your company. If you have any further inquiries on this topic, please feel free to reach out to us!