The ABCs of AGMs

10/03/2020

 
Here you’ll find a comprehensive overview of the rules on annual general meetings in the different jurisdictions of Hong Kong, Singapore, Australia, UK, Cayman Islands and British Virgin Islands. 

What is an annual general meeting?

In many countries, an annual general meeting (AGM) is a statutory requirement for a companys directors and/or shareholders to gather and discuss the companys financial report, overall business performance and strategy. Most jurisdictions have laws and ordinances that govern how companies are run, and alongside the company’s own articles of association (written rules about running the company agreed by the shareholders directors and the company secretary), set out the requirements surrounding AGMs. In my personal view, AGMs increase in importance the more directors, shareholders and interested parties a company has as it allows those who have a stake in the company to be kept in the loop.

Some examples of ordinary business at an AGM:
  • Voting on resolutions
  • Dividend pay-outs
  • Appointment of directors/auditors
  • Remuneration for senior executives and directors
  • Consideration of accounts and balance sheets

Here we will briefly discuss AGMs for Private Companies in 6 different common law jurisdictions: Hong Kong, Singapore, United Kingdom, Australia, the Cayman Islands and the British Virgin Islands.

For each jurisdiction, we will cover the basics of AGMs, including when AGMs should be held and how often, what goes on before and during an AGM, and other important issues such as how to appoint a proxy to attend meetings.

Update: Check your respective jurisdiction on the holding of AGMs due to the ongoing 2019 coronavirus outbreak. AGM requirements may vary due to the extenuating circumstances. Singapore Exchange Regulation, the regulatory body for the Singapore Exchange has given all companies an additional 2 months to hold AGMs amid the virus outbreak. Consider holding AGMs online if your jurisdiction permits it.

Hong KongCompanies Ordinance (Cap. 622)

When do you need to hold AGMs?

Below are the legal requirements, but you won’t run into any trouble as long as the company convenes an AGM every 12 months.

  • Within 9 months after its accounting reference period endsthis applies to a company limited by guarantee or a private company that is not a subsidiary of a public company.
  • No more than 15 months between AGMs
  • First AGM must be held no later than 18 months after incorporation

Notice of an AGM

A company must give at least a 21-day notice to its members, but watch out as the articles of association may have a stricter requirement. The notice must include:
  • Date and time of the AGM
  • Where it’s being held
  • Statement that the meeting is an AGM
  • The general nature of the business to be dealt with at the meeting
  • Where a resolution is intended to be moved at the meeting a notice of the resolution, and (where the company is not a wholly-owned subsidiary) the inclusion of a statement containing details, if any, that is reasonably necessary to show the purpose of the resolution
  • Subject to the articles, a notice must also contain a statement specifying a members right to appoint a proxy

How are AGMs held?

Meetings are generally called by a companys directors and a 21 day+ notice is given to members. A quorum of at least two persons is requiredexcept for single member companies. The Chairman of the Board leads the meeting and the company secretary will coordinate the opening and running of the AGM. AGMs can be conducted through videoconferencing.

What if I can’t attend the AGM?

You have the right to appoint another person as a proxy. A company limited by guarantee may confine proxies to members of the company only.

What if I don’t want to hold the AGM?

There are circumstances that exempt a company from holding AGM:

      • If a resolution to dispense with the holding of an AGM and the resolution is filed with the Companies Registry within 15 days after it has been passed (everyone agrees to not have an AGM that year)
      • If a written resolution in lieu of the AGM is passed (the AGM is done on paper)
      • A single member company is not required to hold an AGM
      • A dormant company is exempted from the requirement to hold AGMs

Always refer to a company’s articles of association/incorporationthey can be used vary these rules.

SingaporeCompanies Act (Cap. 50)

When do you need to hold AGMs?

  • For companies with financial year ending (FYE) on or after 31 August 2018
  • Non-listed company: Within 6 months after end of FYE
  • For companies with financial year ending (FYE) before 31 August 2018
  • Non-listed company: Financial statements you present at an AGM must be made up to a date not more than 6 months before the AGM
  • First AGM must be held no later than 18 months after incorporation

Notice of an AGM

A company must give at least a 14-day notice to its members, but watch out as the articles of association may have a stricter requirement.

  • Date, time, and venue of the AGM
  • Details of any resolutions to be passed
  • Notice of a members right to appoint a proxy (for members who cannot attend in person)
  • Ordinary business to be transacted
  • Copies of the financial statements, balance sheet, and directors or auditors report

Typical AGM Process

Meetings are generally called by a companys directors and a 14 day+ notice is given to members. A quorum of at least two persons is required. The Chairman of the Board leads the meeting and the company secretary will coordinate the opening and running of the AGM. Meeting minutes, passed resolutions, declared interest transactions and officersappointments, need to recorded in the minutesbook. AGMs can be conducted through videoconferencing

What if I can’t attend the AGM?

You have the right to appoint another person as a proxy.

What if I don’t want to hold the AGM?

There are circumstances that exempt a company from holding AGM:

      • Private companies can be exempted from holding AGMs if they send their financial statements to their members within five months after the financial year end
      • If members pass a resolution at a general meeting to dispense with the holding of annual general meetings
      • A dormant company is exempted from the requirement to hold AGMs

Always refer to a company’s articles of association/incorporationthey can be used vary these rules.

United Kingdom

A private company incorporated in the United Kingdom is not required by law to hold an AGM each year, although it may choose to do so and its articles of association may contain provisions requiring the company to hold an AGM each year.

Australia

A private company incorporated in the Australia is not required by law to hold an AGM each year, although it may choose to do so and its articles of association may contain provisions requiring the company to hold an AGM each year.

Cayman Islands

Companies incorporated in the Cayman Islands are not required by law to hold an AGM each year, although it may choose to do so and its articles of association may contain provisions requiring the company to hold an AGM each year.

British Virgin Islands

Companies incorporated in the British Virgin Islands are not required by law to hold an AGM each year, although it may choose to do so and its articles of association may contain provisions requiring the company to hold an AGM each year.

This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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