Do you know enterprises in Singapore mandatorily hold an annual meeting to update their stakeholders on the business’s health? This meeting is called the Annual General Meeting (AGM), wherein the company presents comprehensive financial statements to shareholders. And in return, they are given the opportunity to ask various questions regarding the company’s performance over the past year.
During the AGM, shareholders also make crucial decisions for the company, including appointing a director or removing one. Learn more about what AGM is all about and what happens during this business gathering that makes it vital to Singapore’s businesses. Continue reading below!
When is a Singapore-Registered Company Required to Hold Its AGM?
Before we dig deeper into the importance of AGM, let’s get to know when a company should hold one. As mentioned earlier, AGM is mandatory, and every Singapore-registered business is required to carry it out annually. However, some companies might be exempted, given certain considerations. Unless the company has dispensed with the hold of an AGM, public-listed businesses must hold AGM within four months after their financial year end (FYE), while non-listed businesses have to organise the annual meeting within six months after their FYE.
The FYE date is the company’s deemed FYE anniversary previously confirmed by the registrar. If there’s no notification from the registrar regarding the FYE date, it is assumed to fall on the company’s incorporation date anniversary. Learn more about determining a company’s FYE by directly reaching out to the appropriate office. This is the best way to address all concerns possible.
Important Considerations Before an AGM Takes Place
Now that the definition of AGM and when to hold one has been tackled briefly above, let’s take a closer look at the things to take note of when conducting an annual business meeting attended by company shareholders. Stick around and jot down some key points to ponder!
Dealing with Resolutions
As defined by the company articles, the common resolutions in an ordinary business include appointment of auditors or directors, distribution of dividends, remuneration for senior directors and executives, and presentation of financial statements for the year. The meeting needs to deal with resolutions according to the notice. Thus, other than ordinary businesses, the resolutions are in the AGM’s notice.
It is necessary to note that the members are entitled to propose any resolution for the meeting as long as it is not previously mentioned in the notice.
Meeting the Quorum
Besides keeping company shareholders updated on business performance, AGM is also the time to meet the quorum. It refers to the minimum number of attendees to proceed with the meeting. If the attendees do not reach quorum, the AGM will be invalid. However, when a quorum is unconstitutional, two members or proxies are allowed to go on with the AGM.
Ensuring Proper Appointment of Proxies
When a member cannot attend the AGM, a proxy can act on behalf of that member. But appointing a proxy takes a proper process to make it valid. With a proxy, a member can be replaced during the meeting. The proxy may also vote with the member’s best interest on top of the priority ladder.
Appointing a proxy by an AGM member should be in the company’s constitution. Other than the AGM, this constitution applies to most of the meetings or the current one. The only assurance a proxy can have is to follow the constitutional procedure.
Preparing Proper Financial Accounts
During the meeting, the directors will present the following documents: the director’s report, balance sheet and profit or loss statements, auditor’s report, and notes on the financial statements. It is important to have these presentations ready before the AGM takes place. On the other hand, prepare copies of these documents to be given to the member with the notice of AGM at least fourteen days before the actual meeting.
Upholding Proper Resolutions Voting
Every member has the right to vote, reinforced by the company’s constitution. On the contrary, a member is exempted from the right to vote when the company sends notifications, denies the member’s right to vote, and when the member has unpaid shares. The members use polls or raise their hands to vote, but proxies are not always allowed to do the same unless the company’s constitution permits them to do so.
Closing the AGM
The company secretary is obligated to document what has been discussed in the meeting through the meeting minutes. As soon as the chairman signs the minutes, the meeting is ended. After that, the secretary will file the document for safekeeping and future reference.
That concludes the list of considerations when holding an AGM for a company. A meeting as vital as this requires thorough preparation and proper procedures. As an enterprise in Singapore, it is essential to go above and beyond to make the annual general meeting successful.
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