An annual general meeting (AGM) in Bangladesh is a gathering of interested shareholders that takes place once a year. The company’s directors provide an annual report to shareholders at an AGM that details the company’s performance and direction.
Voting shareholders make decisions about current matters, such as choosing auditors, CEO salaries, dividend payments, and appointments to the company’s board of directors.
PROCEDURE OF THE ANNUAL GENERAL MEETING IN BANGLADESH
After the end of each fiscal year, all companies—with the exception of proprietorships—should conduct an AGM.
A few steps need to be performed to organize an annual general meeting in Bangladesh, and they are listed below:
A company must hold its annual general meeting within nine months of its establishment. Every company shall convene an annual general meeting in accordance with the Gregorian calendar every year as required by section 81. No more than fifteen months shall elapse between any two consecutive annual general meetings.
An annual general meeting may be called within fourteen days after written notice is received.
Any resolution that requires a supermajority (at least 95%) to approve at the general meeting is referred to as a special resolution. A special resolution may be called within twenty-one days of notice where a report must be written by the Board of Directors and distributed to each shareholder before the meeting.
The notice could be sent either through registered email, speed mail, or online.
At the time of the AGM, a quorum of at least two members must be present (proxies included). Public businesses must have at least 5 members in attendance.
The following papers must be shown at the annual general meeting:
- Company’s annual financial report
- Auditor’s Report
- Director’s Report
Shareholders may ask questions about the company’s management, the remuneration report, and the auditors if the AGM chair invites them to do so.
At least five days before the AGM or at the meeting, shareholders may address written inquiries on corporate affairs to the company auditor. Their inquiries must be sent to the board of directors, who will then forward them to the company’s auditor if they have to do with corporate matters.
AGENDA OF AGM IN BANGLADESH
In an AGM, the following topics are covered, or business is transacted:
- The audited financial accounts are taken into account and adopted
- Examining the director’s report as well as the auditor’s report
- Shareholder dividend announcement
- Appointment of new directors to take the place of outgoing ones
- The selection of auditors and setting of their compensation
- Any additional business, in addition to the aforementioned regular business, may be done as a special business of the corporation.
RIGHTS OF AGM MEMBERS
Attendance and voting rights at the AGM are reserved for the company’s members, including shareholders. Members have three options for voting: paper ballots, mail-in ballots, and electronic ballots. During an AGM, members may designate proxies to represent them and cast their votes. The member must sign the proxy form, and the proxy must be designated in writing.
When a corporate shareholder designates a proxy, the proxy form must be signed and sealed by that corporate shareholder. The meeting’s chairman may be chosen by the members themselves. However, if a chairman is designated under the company’s articles of organization, that person will preside over the AGM.
MINUTES OF AN AGM
The minutes of the AGM must be prepared by every firm without exception. The written records of the AGM’s proceedings are referred to as the minutes. They describe the actions that were taken as well as the AGM resolutions that were approved.
Within thirty days following the AGM, the minutes must be approved by all parties and placed into the minute book. At the company’s registered office or another location chosen by the Board, the Minutes book shall be preserved. Any member or shareholder of the business may see the Minutes book of the AGM upon written request to the company and payment of the applicable fee.
TIME EXTENSION FOR HOLDING AN AGM
The Registrar of Companies may extend the deadline by 3 months for conducting an annual general meeting in Bangladesh. The corporation should submit an e-form GNL-1 requesting an extension, outlining the justifications for the extension as well as the length of time the company needs one. The reasons for the extension will be noted by the RoC.
Steps for Submitting a Request for a Time Extension
- A board of directors meeting will be called by the company’s director, and seven days notice must be given to all directors before the meeting.
- Organize a board meeting on the specific day specified in the notification.
- Adopt a board resolution extending the deadline for convening the annual general meeting and stating the uncertain justification for the delay.
- The RJSC office will handle the form submission.
- The Registrar will examine the application on the specified grounds and may approve an extension if they believe it is appropriate to do so.
- Obtain a certificate from the Registrar confirming the extension of the company’s right to convene its annual general meeting.
PENALTY FOR POSTPONING THE AGM
A person or business shall be penalized up to 10,000 takas for failing to convene the annual general meeting in Bangladesh within the time frame required by sub-sections (1) and (2) of section 81 of the Companies Act of 1994, and if the default persists, it will be fined 250 takas for each day the default persists.
Penalties and Repercussions for Failure to Hold an AGM
The Tribunal may order an AGM to be held in accordance with its instructions if a business fails to hold one within the allotted period or the extension it has been granted, whether on its own initiative or in response to a request made by a director or member.
The firm and any officer who breaches the default will each be subject to a punishment of up to Rs 1 lakh if the company continues to fail to conduct a meeting in compliance with the Tribunal’s instructions.
Why Relin Consultants?
The team at Relin Consultants has a wealth of expertise guiding clients through the legal requirements and repercussions of annual general meetings for both domestic and foreign corporations in Bangladesh. Contact us if you have any queries or need legal assistance.
How many AGMs need to be held annually?
A minimum of one Annual General Meeting (AGM) must be held annually by any business that is not a single proprietorship. The first AGM for a newly established firm should take place nine months after the conclusion of the first financial year. Therefore, the firm is exempt from holding an AGM in the same year that it was established.
Does a general meeting fall under the AGM rules?
General meetings can take many different forms in a firm. The guidelines for holding an AGM, quorum requirements, member rights, and AGM minutes must be followed at all general meetings of a firm.
Can a Sunday or a holiday be used for an AGM?
Yes. Any day, even a Sunday, can be used for an AGM as long as that day is not a national holiday. However, the AGM needs to be scheduled on a Sunday from 9 a.m. until 5 p.m. Therefore, a holiday can be used for an annual general meeting.