What is AGM?
Annual General Meeting (AGM) refers to how a company presents the SFRS financial statements to the members or shareholders.
During this point, the shareholders have the right to ask questions about the business’s health.
Therefore, an AGM is important as it is an effective opportunity to address the company’s concerns right on time.
In Singapore, all companies must conduct their AGM on an annual basis. In this way, there will be transparency about the situation and other concerns involving the company.
Effective from 31 August 2018, there are changes in the Companies Act.
Non-listed companies must have their AGM within 6 months and file the Annual Return within 7 months after its financial year-end. When the company is exempted from conducting AGM or dispensed in holding one, details about the company’s Annual Return must be filed.
Listed companies must conduct their AGM within 4 months and file the Annual Return within 5 months after its financial year-end.
What is the AGM Process?
When there is an AGM, the company must present the financial statements to the shareholders, as well as address queries about the company.
The chairman who will conduct the meeting, is usually the board of directors chairman. If the Constitution of the company does not specify the chairman as the meeting’s regulator, then any member can fulfil the role needed in an AGM.
Another thing, it is the responsibility of a company secretary or any appointed secretarial service to prepare the necessary documents for an AGM. One of that is the company’s Constitution.
Below are some notes to consider when conducting an AGM.
1. The meeting needs to deal with resolutions abiding the notice other than ordinary businesses
In an ordinary business defined by the company’s Articles, below are some common resolutions:
- Appointment/removal of Auditors or Directors
- Distribution of dividends
- Remuneration for Senior Directors and Executives
- Financial Statements for the year
At the meeting, the resolutions other than ordinary businesses are in the Notice of AGM.
When there has been a vote on an unmentioned topic in the notice, it will resolve then as not legally valid.
Do note that members have the right to propose any resolution for the meeting.
2. Meeting the Quorum
The quorum refers to the minimum member numbers that must attend the AGM.
In this way, the AGM will then be a valid AGM. If the quorum is not in the Constitution of the company, then the minimum number will be two members or proxies.
3. Make sure that they are properly appointed proxies
A proxy refers to the individual who attends and votes on behalf of the AGM’s member. This individual needs not be a company member to attend and do the vote.
A proxy’s appointment procedure needs to be in the Constitution of the company. Also, the procedure applies to most of the meetings or only one current meeting.
It only needs assurance that the proxies properly follow the procedures.
4. Make Proper Financial Accounts
The company’s directors present the following documents:
- Director’s Report
- Balance Sheet and Profit or Loss Statements
- Auditor’s Report
- Notes to the Financial Statements
Members will receive these documents together with the Notice of the AGM at least 14 days before AGM.
These documents allow the members to prepare queries for the company’s directors.
5. Uphold Proper Voting on Resolutions
The company’s Constitution covers the right to vote of the member and the procedures as well.
Usually, all of the members have the right to vote, barring an exceptional circumstance such as when the company sends notifications, denied the right to vote, and a member who’s still unpaid on the issued shares.
The voting is done by a poll or show of hands but takes note that usually, the proxies aren’t allowed to vote by the show of hands unless it is allowed by the company’s Constitution.
6. Closing the AGM
The company secretary records the AGM minutes in writing and then the chairman of the company signs to approve the minutes.
Next, the company secretary files the Annual Returns on BizFile+.
How to Send AGM Notice?
When convening an AGM, there should be a written Notice of the AGM to all its members. Here are the following:
- Estates of deceased members
- Current company auditors
- Official Assignee (OA) overseeing the affairs of bankrupt members
- Other company Articles’ specified persons
14 days is the minimum period of notice and the company’s Constitution can permit an extension. The period can also be shortened upon the members’ agreement, who are entitled to the right to attend and vote.
1. Details to include in the notice
- The venue, time, and date of the AGM
- Details of resolutions to be passed
- Copies of a full set of the statutory financial statements
- To be transacted ordinary businesses
- Notice of all the members’ right to appoint a proxy of their own choice (This applies to members who are not able to attend personally in the meeting).
2. Serving the notice to the members
The members will receive these notices by email, post, or other forms of digital communications as long as permitted by the company’s Constitution.
3. Special notice
A special notice refers to the requirement under particular circumstances like auditor or director removals.
The company secretary should serve this notice to the members at least 28 days before the meeting.
Timeline for Holding AGMs for Singapore Companies
Listed companies – AGM must be held within four months after your company’s financial year end, and the annual return must be filed within five months.
Non-listed companies – AGM must be held within six months after your company’s financial year end, and the annual return must be filed within seven months.
Dispensing with Annual General Meetings
A private company does not need to hold AGMs if all members agree to do so. The company may pass written resolutions for AGM matters. Copies and other legible forms (such as e-mails) can be circulated, as the company and members agree.
A member may request that an exempt company hold an AGM
Members can request an AGM even if they are exempt or have dispensed with a meeting. The company must be notified 14 days before the end of the sixth month following the financial year end.
An AGM must be held within six months of the end of the financial year, following the request. An Extension of Time can be applied for online to the Registrar before the deadline – that is, within six months after financial year-end if need be.
The company must hold a general meeting to lay the financial statements within 14 days after a member or auditor requests one.
How to apply for an extension of time to hold your annual general meeting
To delay holding the AGM or filing the annual return, you can apply for an Extension of Time (EOT) of up to 60 days.
Your company officer (such as your secretary or director) can apply for an EOT on your behalf. There is a fee of SGD200 for the application.
When must you apply for EOT?
The company must file for EOT application before the AGM/annual return deadline.
ACRA may take up to 14 working days to process the EOT application. If there are any clarifications required, the process may take longer. As such, you should submit your EOT application at least 14 days in advance.
Penalties for failing to hold an annual general meeting
Directors who fail to comply with the AGM requirements may be prosecuted. This may result in disqualification or debarment from becoming a director. Furthermore, ACRA may impose composition fines on companies that do not hold the required annual general meetings.
A late filing fee will be imposed separately for each late annual return.
Conclusion
No doubt, conducting your Annual General Meetings can be a time-consuming task and there are many things to take note.
Do reach out to our Corporate Secretarial Service Team. Please send us an enquiry and our team will contact you.