WHAT IS AGM (ANNUAL GENERAL MEETING)?
According to ACRA in Singapore, an AGM is a mandatory annual meeting for a company with its shareholders. AGM is an obligatory requirement for every company in Singapore. In general, there are two main purposes for holding an AGM.
AGM is utilized to present the company’s financial statements to the shareholders and act as the platform used by the shareholders to weigh down and question every financial and business decision made in the company. During the AGM, financial statements and other major business matters must be presented to the shareholder for approval.
AGM also serves as the main platform for every shareholder or member of the company to propose either ordinary resolutions or special resolutions. Although holding an AGM is mandatory, as stated by the Companies Act in Singapore, it can be waived by a director’s written resolution.
Before holding an AGM, a written notice must be circulated to all of the company’s executives, members, shareholders, and directors that notify them of the date, time, and necessary details for the meeting.
The table below covers all the necessary due dates depending on the nature of your company.
|Types of Financial Year-End (FYE)||Listed Company||Not a Listed Company|
|FYE On/After Amendment on 31st August 2018||Within 4 months after FYE||Within 6 months after FYE|
Notably, the AGM is set to be held at the location of the registered office. However, it can also be held anywhere as long as the members agree.
WHAT SHOULD BE PRESENTED DURING THE AGM?
Holding an AGM for the company comes with specific intentions and purposes. Hence, during the AGM, several matters are obligatory to be presented during the meeting.
Financial statements and business transaction
The director of the company is held responsible to present its financial statements to all of the company’s shareholders. The financial statements will provide all the profits and losses for the company for their financial year end (FYE).
Additionally, certain decisions that are made in the company are also required to be presented to all shareholders and members of the company. This is because the shareholders will grant their approval for certain business transactions for the company during the AGM. The director is mandated to give out justifications for a major business transaction of the company to obtain the shareholder’s approval.
There are another few mandatory business matters that require the company’s shareholders’ approval (if any), such as below.
- Declaration of dividend distributed for each shareholder
- Director’s retirement
- New director’s appointment
- Authorization of director’s remuneration
- Selecting the company’s auditors
- Company’s account and balance sheets.
Propose a resolution on significant matters
An AGM will require the shareholder to grant their approval for any major business decisions of the company. The approval and decisions of the shareholders are made in the form of passing resolutions. Generally, there are two types of resolutions.
The passing of ordinary resolutions concerns ordinary or regular business activities that require approval from the shareholders. Only a simple majority of at least 50% is required to adopt an ordinary resolution.
Special Resolution (applicable if any)
A special resolution refers to the specific business matters that hold major changes for the company. Special resolution differs from ordinary resolution, requiring at least 75% of approval to pass the resolution. Examples of specific business matters that require a special resolution are matters such as an alteration to the company’s name, reduction in the company’s share capital, and amendments to the corporation’s constitutions.
STEP BY STEP TO CONDUCT AN AGM
The process to conduct an AGM for your Singapore-incorporated company is relatively easy and straightforward. All of the AGM-related processes can commence after the end of the fiscal year of the company.
Below, we provide you with a two-step guide on how to conduct an AGM for your Singapore company.
STEP 1: Distribute the written notice for AGM
The first step to conducting an AGM is to produce and circulate the written notice for the company’s AGM. All of the board members, shareholders, and corporate executives must be notified of upcoming meetings from the corporation.
The notice should include the following:
- The meeting’s date
- The meeting’s time
- The meeting’s location
- Meeting’s agenda
- Any proxy-designation rights to the shareholders
- Any special resolutions (together with the requisite number of votes for the solutions)
- Copies of the balance sheet, financial statements, and director’s or auditor’s report
Notifications must be delivered successfully to all of the members qualified to attend the meeting at least two weeks before the AGM. If the AGM requires the adoption of an ordinary resolution, it is mandatory to issue the written notice at least 14 days before the AGM. 21 days for matters involving the use of special resolutions, and 28 days for matters requiring special notice during the AGM. In some instances, such as when directors or auditors are fired, a special notification is necessary.
STEP 2: Send the mandatory documents to shareholders
After commencing the distribution of the Written Notice for the AGM, the company must send the required documents for the AGM to the shareholders. The company’s shareholders must receive copies of papers such as financial statements, balance sheets, director’s reports, and auditor’s reports before the date of the meeting.
Once both of these steps are completed, the AGM can be conducted successfully following the stipulated date and time in the Written Notice. All the mandatory matters to be presented during the AGM will be resolved during the meeting.
If you have further inquiries on conducting an AGM for your Singapore Company, reach out to us at firstname.lastname@example.org.
Is It Mandatory To Hold An AGM?
As far as the law that has been stipulated by the Companies Act in Singapore, all company or corporations is mandated to hold their AGM within their stipulated deadlines. According to the Companies Act, Section 175A,
A company can be exempted from conducting an annual general meeting for their financial year end if,
- if it is a private corporation in the effect of a previous resolution that forces to dispense the annual general meetings
- if it is a private corporation that has sent out the notice of general meetings and the mandatory documents such as a copy of the audited financial statements and the balance sheet of the company to all eligible personnel within 5 months after the financial year-end.
- if it is both a private business and dormant company in which the directors fulfill certain requirements such as:
- the company has been dormant from its formation time and since the end of the previous financial year
- the directors of the dormant company have sent the report to the Registrar stating that the company has been dormant for the period stated in (a) above.
- the statement above in (b) is sent to the Registrar simultaneously with the submission of the dormant company’s annual return to the ACRA.
How To Waive The AGM For The Company?
A private company may dispense the holding of an AGM by a written resolution as per section 175A of the CA.
A written resolution must be approved by the shareholders. Subsequently, a private business is granted the option not to hold the company’s AGM. A majority vote is necessary for the approval of passing the resolution.
Is There Any Penalty For Failure To Hold The AGM Before The Deadline?
Failure to conduct an AGM within the time frame can subject the company to a penalty as stipulated by the statutory law in Singapore. Other than that, the company’s director will face a penalty if the financial statements and accounts presented during the AGM are not updated. The penalty is in the form of a financial fine of S$ 300 to S$ 5,000.
Regardless of that, a company can seek an extension of time with ACRA before the deadline if the company is unable to convene an AGM within the allotted timeframe. The “EOT” can be applied through the ACRA portal under the ‘annual filing’ and choose ‘the extension of time for AGM/Annual Return’ on the site. The company officer, such as the director, secretary, or a hired professional firm, may request the extension on behalf of the business.
The “EOT” application costs $200 each. The majority of “EOT” applications will require up to 14 days for processing. The clearance may take up to 30 days if more explanations are needed. The Director of the company will be held accountable for the failure to file for an extension of time and hold the AGM for the company.
A Singapore company must also file the annual return within one month from the AGM date. You can refer to the annual requirement of a Singapore company for more information.
You can visit the ACRA site for further information regarding penalties for not holding an AGM.
In a nutshell, holding an AGM, or annual general meeting is mandatory in Singapore. In return, every corporation shareholder will be granted the opportunity to participate in the company’s decision-making process.
By holding an AGM, a much more transparent environment and financial situation will be promoted within the company structure. Therefore, the guide above in this article hopes to assist you in comprehending the steps and requirements that are required for the AGM.
Can AGM be conducted in a virtual setting?
Yes, AGM can be conducted in a virtual setting. According to the Updated Guidance on the Conduct of General Meetings Amid Evolving COVID-19 Situation by ACRA Singapore, an AGM can be conducted in a virtual and online meeting.
Can AGM be postponed?
Yes, an AGM can be postponed by applying an EOT with ACRA before the deadline. This process will require a fee of S$200.
Can a dormant company be exempted from AGM in Singapore?
A dormant company must still conduct the AGM and file the annual returns. However, the AGM can be conducted via written resolutions instead of a physical AGM as a dormant company will not have many matters for discussion.
What is the minimum number of present members for the AGM?
The minimum number of present members for the AGM is referred to as the quorum. In Singapore, a quorum requires a personal presence of at least 2 members, unless the company’s constitutions have specified otherwise beforehand. Without the fulfillment of the quorum, the company cannot conduct and proceed with any of the business approvals in the meeting.
What to do if a member of the company cannot come to the AGM?
A shareholder who is unable to attend the AGM may designate a proxy to represent him or her during the meeting. According to the Companies Act, Section 181, a proxy who is designated to represent a member at the meeting also has the same ability to speak as the member and cast his/her vote. A member may designate up to two proxies to attend the AGM and neither of them must be a member of the company. To nominate a proxy, the member must fill in the proxy form attached with the Written Notice of the company’s AGM. This form authorizes the proxy to act on the shareholder’s behalf. However, the actions of a proxy can be limited to the company’s constitution. Refer to the Companies Act, Section 181 for further information.