About Annual General Meetings
In Singapore, it is mandatory for a newly developed company to conduct their first AGM in the first 18 months of incorporation. This is to comply with the Company’s Act of Singapore. The subsequent AGM meetings must take place once in every economic year. The other meetings should be within 15 months from the previous AGM. This is mandatory that all international and local registered companies in Singapore must pay attention to it. There must be a notice of 14 days before they conduct a meeting.
A yearly general meeting (AGM) is meant for your company to show the shareholders so they can ask questions about the business’ health. Therefore, an AGM is a chance to address concerns.
You must announce the company’s AGM date at the ACRA when you fill your company’s Annual Return with their Authority.
The Relevance of Annual General Meeting to Shareholders
The company shareholders are the actual owners because their shares are parts of the company ownership. Their ownership is an entitlement of the shareholders so they can decide on business matters that need their approval. These meetings are an opportunity for the shareholders to have control over the company affairs. They do this by approving the business matters the company proposes during meetings.
That means it is mandatory for all Singapore companies to have a shareholders’ meeting every year with specific intervals between them.
Companies That Must Conduct Annual General Meetings
For public companies, it is mandatory that they have this meeting. However, for private companies, it is not a requirement. They can hold an AGM, but the Singapore company law gives private companies a choice to opt-out of holding AGMs.
However, there are conditions for private companies because of the exemption. These are:
- If a shareholder wants an AGM, they must tell the company to do it. They must give notice to the company within 14 days prior to the end of 6 months after the financial year of the company.
- Directors should hold a meeting within 6 months after the financial year ends following the request. Therefore, the company has permission to seek approval from ACRA for a time extension to hold an AGM if necessary.
- If any shareholder or auditor asks to see the financial statements, private companies must have an AGM within 14 days after the financial statements were sent out for that.
Private companies are allowed to not hold AGMs which are subject to a resolution that members or their proxies vote on.
Here are the obligations after AGM dispensation:
- Preparing financial statements of the company when the financial year ends.
- Sending the current financial statements and supporting documents.
- Circulating the resolutions written and created by shareholders.
It is worth noting that despite the resolution, an AGM can still take place by request. This is applicable if the request is given 14 days before the end of 6 months since the end of the financial year.
In case the resolution is no longer in force, they should still hold an AGM if there is still at least 3 months left before the AGM due date.
The Meeting’s Purpose
AGMs are primarily for the purpose of presenting the financial statements and approval of the company’s business transactions.
The company should present the entire financial statement to the shareholders. The financial statements must show a “true and fair” angle of the company’s performance that year. In public statements, shareholders must adopt and give their approval of the financial statements according to a simple majority.
Here is the timeline the Company Law has to present financial statements:
- Within 14 months from the time when the financial year ends for a public company.
- Within 6 months from the end of the financial year for any company.
Aside from presenting its financial statements, the company must also approve company business transactions. Here are some business matters that need shareholders’ approval in the AGM:
- Declaration of dividends
- The appointment and retirement of directors
- Appointing auditors
- Approval of the issue shares
Guidelines When Holding Annual General Meetings
Make Sure to Meet the Quorum
The quorum refers to at least how many guests should be at the AGM for it to be valid.
If it is not written in the company constitution, there must be at least two members or proxies.
Make Sure the Proxies Were Properly Chosen
A proxy may participate and vote on the member’s behalf during the AGM. There is no need for the proxy to be a company member.
The proper procedure of choosing a proxy must be part of your company’s constitution; the procedure could be for all meetings, or only for the current one.
Make sure that all members are following the procedures through their proxies.
Ensure That the Accounts Are Properly Laid Out
Directors are the ones to present the documents like the financial statements, balance sheets, director’s report, and auditor’s report.
There Must Be Proper Voting on Different Resolutions
The company constitution includes the members voting rights and voting procedures.
Normally, all members can vote, which stops exceptional circumstances. The voting happens through a show of hands or poll. However, it is worth noting that proxies may not usually vote by raising their hands. The only exception is if the company permits them to.
Ending the AGM
There has to be a record in writing of the AGM with minutes, and the company chairman must sign it. After that, the company must file an annual returns report through BizFile+.
You can contact 3E Accounting for Incorporation Services in Singapore, so they can guide you through all the steps.