An annual general meeting (AGM) is a mandatory yearly gathering of a company’s stakeholders to discuss important matters concerning the business. At this event, the company’s board of directors delivers an annual report containing information about the company’s performance and strategies to shareholders.
The purpose of holding these meetings is to provide shareholders with a comprehensive overview of the company’s operations and financial health and to gather their input and feedback on important decisions.
The timing of these meetings may vary depending on the company’s bylaws, but they are typically held once a year.
The AGM is a crucial platform for a company to communicate information to its stakeholders. The meeting provides an opportunity to discuss financial reports, audits, and other important updates. Stakeholders can use this information to make informed decisions.
The company is also obligated to comply with legal requirements by presenting and approving audited accounts and addressing any pending issues during the AGM.
In addition to financial matters, stakeholders can discuss directors’ compensation, and future activities, and raise any other concerns they may have.
The AGM is presided over by the chairperson of the organization who provides an overview of the company’s status.
Stakeholders are encouraged to attend AGMs after reviewing the company’s previous and current annual reports, which enables them to discuss emerging issues from an informed perspective.
By fulfilling their roles, attendees and organizers can benefit the company and its employees from the results of these meetings.
Attendance at the yearly meeting of stakeholders and company executives is mandatory for all parties involved.
During the AGM, important matters such as company account reviews, audited accounts, elections, and fiscal records from the past year are discussed.
As per the Companies Act, all Singaporean companies are required to hold an annual general meeting at least once a year, and there must be no more than a 15-month interval between two consecutive AGMs.
Dispensing of this mandatory requirement:
Although AGMs are mandatory, there is an exception that private companies can take advantage of.
Private companies are exempt from holding AGMs if they provide their financial statements to their members within five months of the end of the financial year. This law was enacted in August 2018.
However, this exemption is subject to specific safeguards:
- A member who wants to request an AGM must notify the company no later than 14 days before the end of the sixth month following the financial year’s end.
- If a member requests an AGM, directors must hold it within six months after the financial year-end. The company may seek approval from the Registrar to extend the deadline for holding the AGM.
- If any member or auditor requests a general meeting to lay financial statements, private companies must hold one within 14 days of the request.
Private dormant relevant companies, which are not required to prepare financial statements, do not need to hold AGMs but are subject to the above safeguards.
A private dormant relevant company is a non-listed and non-subsidiary company with total assets equal to or less than $500,000 (consolidated value if it is an ultimate parent).
If all members agree, a company can dispense with holding an AGM by passing a resolution.
In place of an AGM, companies may use written resolutions to address issues that would have been discussed during the meeting. The company and members may agree to circulate the written resolutions via hardcopies or other legible forms, such as email.
However, a member can still request an AGM for a private company, even if it is exempt or has dispensed with holding an AGM. To do so, they must notify the company no later than 14 days before the end of the sixth month after the company’s financial year-end.
After receiving a request for an AGM, the company’s directors must hold the meeting within six months after the financial year-end.
The editorial team at singaporesecretaryservices.com