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What Is an Annual General Meeting (AGM) In Singapore.
CMO Media Lab Pte Ltd • Jan 10, 2022
Annual General Meetings (AGMs) in Singapore
For all Singapore companies, an Annual General Meeting (AGM) is one of the compliance requirements. An annual meeting is required by law for a corporation to keep its shareholders informed about the firm's financial performance, business health, and development. Shareholders are given the ability to ask questions, vote, and make vitally important decisions.
When Must a Company Hold its AGM?
Section 175 of the Companies Act requires any business with a Financial Year End (FYE) ending before 31 August 2018 to have its first AGM within 18 months after establishment. Subsequent meetings must be conducted every calendar year, with no more than 15 months between such AGMs.
At least 14 days before the AGM, the firm must provide a written notice to shareholders (including the date, time, and location of the AGM, as well as the specifics of the resolution to be carried).
AGMs will be conducted for firms with a financial year ending on or after August 31, 2018:
- For listed companies: within four months after the financial year-end.
- For any other company: within six months after the financial year-end.
Objectives of AGM in Singapore
The objective of the AGM is to verify that the business complies with all legal requirements, such as the company's financial statements, the presentation of a new auditor, and so on, to make crucial decisions to safeguard the company's welfare and to inform shareholders on the company's operations.
Here are the two types of objectives of AGM Singapore:
1) Objectives in Ordinary Business
- To present and get approval for the audited accounts from the company's members.
- The new members of the Board of Directors will be elected by a vote.
- To choose auditors for the following calendar year.
- To declare and confirm the company's dividends.
2) Objectives in Special Business
- To resolve any disputes or disagreements presented by the corporate entity's investors.
The Process of an Annual General Meeting (AGM)
During an AGM, the company delivers its financial accounts to members and answers any questions about the company.
AGMs are led by the chairman of the meeting, who is often the chairman of the board of directors. However, if your company's Constitution does not provide for a chairman to preside over the meeting, any member might be chosen to the position during the AGM.
The corporate secretary – or a secretarial service – is responsible for preparing any necessary documentation for the AGM (e.g., the company Constitution).
When holding your AGM, please take note of the following:
1) Aside from ordinary business, the meeting should only consider resolutions for which notice has been provided.
Ordinary business is specified in your company's Articles and may contain topics such as:
- Dividend pay-outs
- Appointment of directors/auditors
- Remuneration for senior executives and directors
- Consideration of accounts and balance sheets
Other subjects may be considered a special business. Any resolutions passed at the meeting that were not related to routine business should have been stated in the AGM Notice.
2) Make sure you meet the quorum
The quorum is the minimum number of members who must attend the AGM for it to be legitimate. If your company's Constitution does not specify a quorum, the minimum number is two members (or their proxies).
3) Ensure proxies are appropriately appointed.
A proxy may attend and vote at the AGM on behalf of a member. The proxy does not have to be a corporate employee.
The mechanism for appointing a proxy should be included in your company's Constitution; the procedure may apply to all meetings or only the present meeting.
Check to see whether members utilizing proxies followed the instructions.
4) Ensure the proper laying of accounts.
Directors are in charge of presenting documents such as:
- Financial statements
- Balance sheets
- Director’s report
- Auditor’s report (if applicable)
These documents should also be delivered with the AGM Notice at least 14 days before the meeting. Members will be able to prepare questions for the directors as a result of this.
5) Ensure proper voting on various resolutions.
The voting rights of your company's members, as well as the voting methods, are covered in your company's Constitution.
Unless there are extraordinary circumstances, all members have the right to vote (e.g., a member who has not paid up for shares issued to them, when notified by the company, may be denied the right the vote).
Voting is done by a show of hands or a poll; however, proxies usually are not permitted to vote through a show of hands unless the company's Constitution allows it.
6) Closing your AGM
Can an AGM Be Held Virtually?
Traditionally, AGMs were held in person, but due to the COVID-19 pandemic, many AGMs are now convened remotely.
Filing Annual Return
Every locally incorporated business is required by the Companies Act to submit their annual returns (the electronic document that every company must file with ACRA every year to maintain its basic information up to date) within the specified schedule.
When the annual return is submitted, it must be signed by either a company director or a company secretary.
The following information is included in an annual return:
- Company Name and Registration Number
- Principal activities
- Registered Office Address
- Details of company officers (directors, secretary)
- Shareholder details, share capital, etc.
- Dates of Annual Returns, Annual General Meeting, and Accounts
- Financial statements (XBRL format), if necessary
Dispensation of AGM in Singapore
Private limited companies may choose not to have an AGM in line with Section 175(A) of the Singapore Companies Act only if shareholders and members unanimously approve a written resolution. All specified subjects for debate during the AGM are combated by delivering written resolutions to every member as long as the decision about the dispensation of the AGM has been approved.
Following the dispensation of the AGM, there are some obligations, which include:
- Preparing financial statements for the company at the end of each fiscal year
- Sending financial statements and other documents to shareholders (such as the Director's Report and Statement)
- The AGM-related resolutions that shareholders have approved in writing are being circulated.
It is crucial to remember that, despite the passage of such a resolution, a business member might still request that an AGM be conducted. This applies if the request is filed within 14 days of the final day of the sixth month after the company's FYE.
If or when such a resolution no longer has an effect, the AGM must still be convened if there are at least three months before the AGM due date from the day such resolution no longer has an impact.
Exemption from Holding AGMs
A private company may avoid conducting annual general meetings if its financial statements are sent to its shareholders within five months after its fiscal year-end. Annual general meetings are not required for dormant private companies that are excluded from having to produce financial statements.
However, there are several conditions to this exemption:
- If a member intends to propose an AGM, he or she must first contact the company. The company must be notified 14 days before the end of the 6th month after the company's FYE.
- According to that member’s request, directors must conduct an AGM within 6 months following the FYE. If necessary, the company may apply to ACRA for a time extension to convene the AGM.
- Private firms must have an AGM not later than 14 days after the financial statements are handed out for that particular purpose if any member or auditor requests the laying of the financial statement.
Penalties for Failure to Hold an Annual General Meeting in Singapore
ACRA may impose fines and/or judicial proceedings on company officers who fail to comply with the requirements for hosting an AGM and submitting an annual report.
Finally, in Singapore, compliance with the Companies Act and ACRA laws and procedures is a legal necessity for all businesses.
Conclusion
In conclusion, AGMs are a pretty interesting and important part of how companies interact with their shareholders. If you need help running your company’s AGM, we can make sure everything goes smoothly!
We can also offer expert advice on any concerns about the financial performance or situation of your company. So if there's anything you want to know more about at an AGM that hasn't been covered here - just get in touch!
