Process of AGM

During an AGM, the company will present the annual financial statements to all its members, and answers any queries regarding the financial performance the business posted by the members.

AGMs are conducted under the direction of a chairman of the meeting, usually the chairman of the board of directors.

In the event that the company’s Constitution does not specify a chairman to run the meeting, any member can be elected at the AGM to fulfil the role of the chairman of the meeting.

The company secretary is required to prepare any necessary documentation for the AGM (e.g. the company’s Constitution).

The following points must be noted when running the AGM of the company:

 

1. The meeting should only deal with resolutions for which notice has been given to the members apart from ordinary business.

Ordinary business is defined in your company’s Articles of Association, and may include subjects such as:

  • The approval of the annual financial statements of the company;
  • The retirement and re-election of the directors (if applicable);
  • Approval of the remuneration for senior executives and directors;
  • Approval of final dividends to be declared and paid.
  • The appointment and re-appointment of auditors and their remuneration fixed;

Subjects other than those above are considered as special business.

Any resolutions at the meeting, other than ordinary business, should have been mentioned in the Notice of the AGM.

If a member votes on a topic that was not mentioned in the notice, the resolution may not be legally valid. The reason is because a member with voting rights may be absent during the meeting, and have no knowledge of the matter unless he was notified.

Note that members also have the right to propose resolutions for the meeting. However, they must bear the expense of circulating such resolutions to the other members.

 

2. Make sure the quorum is met

The quorum is the minimum number of members who must attend the AGM.

If the quorum is not specifically stated in the company’s Constitution, the minimum number is two members (or their proxies).

 

3. Ensure proxies are properly appointed.

A proxy can attend and vote on behalf of a member at the AGM. The proxy does not need to be a member of your company.

The procedure for appointment of a proxy should be stated in the company’s Constitution. The procedure may be applicable for all meetings or only for the current meeting.

Ensure that the procedures have been followed by members using proxies.

4. Ensure the proper laying of accounts.

Directors are responsible for presenting documents such as:

  • Financial statements
  • Balance sheets
  • Director’s report
  • Auditor’s report (if applicable)

Notice of the AGM should be sent together with the materials at least 14 days prior to the meeting. This is to allow shareholders to prepare questions for the directors.

 

5. Ensure proper voting on various resolutions.

The Constitution of the company covers the voting rights of members, as well as the procedures for voting.

Usually, all members get the right to vote, barring exceptional circumstances (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. Proxies are usually not allowed to vote by a show of hands, unless the Constitution of the company allows this.

 

6. Closing of the AGM should be in writing and signed by the Chairman

The minutes of the AGM must be recorded in writing, and signed by the company chairman. The company must then file its Annual Returns on BizFile+.

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