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Annual General Meeting (AGM) for Limited Companies: A Step-by-Step Guide

Upon registering of a company and obtaining all specific licenses mandatory to operate a business, a company is additionally required to conduct its operations in accordance with the binding laws and regulations, including the company’s Articles Of Association (AOA) which lays standard rules a company sets and needs to act in accordance with, including Shareholders’ Meetings.

As per the law, a limited company needs to conduct an Annual General Meeting (AGM) of shareholders’ to discuss and present matters for consideration, vote and approve the agendas, record the Minutes of Meeting, which is to be certified by the Chairman and submitted at the relevant departments for a certain transaction the company intends to register, such as opening a bank account.

Prior to holding an AGM, a series of process needs to be completed, as follows:

  1. Issuing a Letter of Invitation to the Committee
  2. Arranging a Committee Meeting to consider the following agendas:
    2.1 Certify the report of the company’s operating results for the past fiscal year.
    2.2 Approve the audited Financial Statements.
    2.3 Election of Directors to replace those who retire by rotation.
    2.4 Approve the auditor for the next fiscal year and determine the auditor’s remuneration.
    2.5 Consider paying dividends and allocating reserve funds.
    2.6 Approve to call the AGM and set the meeting agenda and
    2.7 Consider other matters (if any)
  3. The Director(s) shall send a Notification to the shareholders.
  4. Arrange the AGM which should at least cover the following agenda:
    4.1 Certify the report of the company’s operating results for the past fiscal year.
    4.2 Approve the audited financial Statements.
    4.3 Election of Directors to replace those who retire by rotation.
    4.4 Approve the auditor for the next fiscal year and determine the auditor’s remuneration.
    4.5 Consider paying dividends and allocating reserve funds.

Notification

Notice of the summoning of every general meeting shall be sent by post to all shareholders no later than 7 days before the AGM. If share certificates have been issued to shareholders, the notice shall also be published in the local newspaper at least once and not later than 7 days before the meeting date. However, if the notice is for a special resolution to be passed at the meeting, such notification shall be given at least 14 days before the fixed date.

The details of the notice shall include Place, Date, Time, Nature of business to be transacted at the meeting. If the notice pertains to a special resolution, the substance of the proposed resolution shall also be included in the notice.

In case of a shareholder not being able to attend the meeting in person, a Proxy may be appointed to attend and act on behalf of the shareholder. For a proxy appointment to have full legal effect, the instrument appointing the proxy shall be dated, and signed by the shareholder. It must contain the following particulars:

1) The number of shares held by the shareholder.

2) The name of the proxy.

3) The specific meeting or period for which the proxy is appointed.

To ensure the proxy is effective, the proxy form must be submitted to the chairman at or before the start of the meeting at which the shareholder wishes to vote.

Meeting Minutes

As mentioned above, Minutes are required to be recorded for both shareholder meetings and board meetings. The minutes of the meeting, once signed by the chairman, shall be deemed to represent the resolutions and actions taken at the meeting as valid.

Financial Statements

Financial statements must be audited by an auditor(s) and presented for approval at the AGM within 4 months from the date of the financial statements. Since the AGM date is implicitly tied to the end of the company’s fiscal year, if the company’s fiscal year ends on December 31st, the AGM must be held by April 30th of the following year.

A copy of the audited financial statements must be provided to all shareholders at least 3 days before the AGM.

It is the duty of the director(s) to submit a copy of the audited financial statements to the Registrar no later than 1 month from the date the financial statements were approved at the meeting.

In order to act in compliance with the timelines and meet the requirements of the government offices/ financial institutes, Umpire Legal can help you keep track of the process and the dates, send the invitations, do the necessary publications, in some cases, even backdate the notices, record the minutes and get the changes made as intended for your business.