What is a Shareholders’ Resolution to Remove Need for an Annual General Meeting (AGM)?
A Shareholders’ Resolution to Remove Need for an Annual General Meeting (AGM) is a resolution to remove the requirement to hold an AGM once and for all.
See also: Shareholders’ Resolution in Lieu of an Annual General Meeting (AGM)
To save time and administrative effort of holding an AGM every year, a company may use to remove such requirement by using a Shareholders’ Resolution to Remove Need for an Annual General Meeting.
Important Note: The financial statements and reports originally required to be laid before an AGM will still need to be sent to the shareholders and the resolutions to be passed will need to be passed in writing. A Shareholders’ Resolution in Lieu of an Annual General Meeting (AGM) may be used.
After using a Shareholders’ Resolution to Remove Need for an Annual General Meeting, remember to file the relevant form to update the relevant government department or registry within the statutory time limit.
What is the purpose of an annual general meeting?
Annual General Meeting (AGM) is a scheduled meeting that is conducted annually to discuss the overall growth of an organization, opportunities, and other routine tasks. The purpose of an AGM is to give shareholders the opportunity to ask questions, receive information, and meet with the directors.
How to write minutes of a meeting for removing the need for an annual general meeting?
A minute is basically a set of records and agendas of the meeting. It acts as a source of information for those participants who were unable to attend the meeting. The important things to consider while writing a meeting minute are:
Date, time, and place of the meeting: It is very important to write clearly about the date, time, and venue of the meeting. This will help the meeting participants to prepare in advance and avoid mis-confusion.
List of participants: While drafting a meeting minute, a list of all participants who are going to attend the meeting should be clearly written.
Agenda of the meeting: A well-written agenda or purpose in the meeting minute can help participants prepare better for the meeting which will also help to increase the overall productivity of the meeting.
Actions plans: For each agenda, well-written action plans and steps should be clearly written.
Next meeting information: information about subsequent meetings should be mentioned in the meeting minute to let participants know about the next meeting in advance.
How to implement Shareholders’ Resolution to Remove Need for an Annual General Meeting (AGM)?
There are two options when using a Shareholders’ Resolution to remove the need for an annual general meeting. I.e.;
- if a general meeting (i.e., a meeting of shareholders) is convened to remove the need for an annual general meeting, use a Minutes of a General Meeting to remove the need for an annual general meeting; or
- if the company has only one shareholder or the shareholders choose to pass the resolution by way of a written resolution, use a Written Resolution to remove the need for an annual general meeting.
What right do all common shareholders have over a company?
The main rights that all common shareholders have over a company are:
Voting Rights: Every shareholder has a voting right to elect the directors in the company annual meeting. If they are not able to vote physically, they can do so by using a proxy and mail in their vote.
Ownership in a portion of the company: Every shareholder has some amount of ownership in the company. However, the influence of shareholders over a company entirely depends upon the number of shares he/she acquires. They also have a claim on the portion of assets owned by the company.
Right to dividends: Dividends can be defined as the sum of money paid to shareholders by the company out of its profits. So, whenever the company makes some profit all the shareholders have the right to get the dividends out of that profit.
Right to transfer ownership: All the common shareholders have the right to sell their shares to another person according to their needs. When they sell their shares, automatically the ownership gets transferred to another person.
Right to information: Shareholders are also entitled to the right to information such as examining basic documents like company bylaws and minutes done by board meetings.
Who can propose a resolution at the AGM?
Only members can propose a resolution at the AGM. However, the resolution has to be seconded by another member who is also entitled for the same. On the other hand, members who hold preference shares, members who hold equity shares and, or as specified in certain acts are still entitled to vote on the Resolution.
However, a Director should not propose any resolutions that interests them. Also, they cannot participate in discussions or vote on such kinds of Resolution.
Conclusion
Companies adopt Shareholders’ Resolution to Remove Need for an Annual General Meeting to save time and administrative effort of holding an annual general meeting every year.
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