An annual general meeting (AGM) is a yearly gathering between the shareholders of a company and its board of directors. Generally, this is the only time that the directors and shareholders will meet throughout the year, so it is a chance for the directors to present the company's annual report.
The key difference is that an AGM is a scheduled meeting which must be held annually. On the other hand, an EGM is an ad-hoc meeting convened in response to an urgent matter. While the two meetings hold different purposes, the legal requirements surrounding their operation are similar in nature.
Purpose of Annual General MeetingAnnual general meetings are held to conduct the business on behalf of the company. To take important decisions regarding the company. To inform the shareholders about the previous and future activities of the company.
The annual meeting usually includes the following activities: Election of directors whose terms are up for renewal or to fill vacancies on the board of directors. Declaration of a dividend or changes in the dividend policy. Review of the corporation's annual report.
An extraordinary general meeting (EGM) refers to any shareholder meeting called by a company other than it's scheduled annual meeting. The extraordinary general meeting is utilized to deal with urgent matters that come up between annual shareholders' meetings.
An extraordinary general meeting can be called by a: committee member (if approved by the majority of voting committee members) or. written request signed by at least 25% of lot owners or their representatives or. person authorised by an adjudicator's order.
The Constitution will usually prescribe the time period in which notice of an AGM is to be given. The standard number of days is 21 or 28 but sometimes, depending on the nature of the organisation, it may be up to 45 days. Notice periods are critical and must be observed and adhered to.
A meeting is a gathering that has a purpose. General meetings include any meetings of members (usually shareholders) such as annual general meetings (AGMs), meetings of different classes of members and creditors' meetings. General meetings are governed by Part 2G. 2 – Part 2G.
What is the Procedure to Hold an AGM? The company must give a clear 21 days' notice to its members for calling the AGM. The notice should mention the place, the date and day of the meeting, the hour at which the meeting is scheduled. The notice should also mention the business to be conducted at the AGM.
A notice calling a General meeting has to be in writing and to be given at least 21 Clear Days before the meeting date. The new Act has added the expression “clear days”. It means day of giving of notice and day of the meeting are to be excluded.
The company is not bared for holding AGM beyond prescribed time period, but it will subject to certain penalties as mentioned under section 99 of Companies Act, 2013. If AGM couldn't be held on time, neither extension was sought, Company may go to NCLT/RD under compounding of offenses.
The chairman, if any, of the board of directors or in his absence some other director nominated by the directors shall preside as chairman of the meeting, but if neither the chairman nor such other director (if any) be present within fifteen minutes after the time appointed for holding the meeting and willing to act,
Calling and purpose of an AGMIf the Model constitution applies, members must be given at least 14 days' notice of an AGM or 21 days' notice if a special resolution is to be proposed.
Annual General Meeting (AGM) is a meeting conducted by every Private Limited Company or Limited Company that provides an opportunity to the shareholders to meet every year and discuss matters relating to the Company. The AGM ensures the interest of the shareholders is protected.
Under the Corporations Act 2001 (Cth), public companies with more than one member must hold an AGM at least once per the calendar year. While there is no requirement for proprietary companies (i.e. private companies) to hold an AGM, they may choose to do so.
An Agenda consisting of:
- Welcome by chairperson.
- Apologies.
- Confirmation of minutes of the previous AGM.
- Business arising from the minutes.
- Chairperson's report.
- Treasurer's report and presentation of audited financial statement.
- Election of Office Bearers.
- General business.
Your constitution usually states when you should hold your AGM. Some constitutions give a specific month, others say between 12 and 15 months of the last AGM, or as soon after as practicably possible. Most constitutions say that the Management Committee will decide when the AGM will be held.
How to conduct the annual meeting of shareholders
- Steps to Hold An Annual Meeting:
- Schedule Meeting and Send Notice.
- Conduct the Annual Shareholder's Meeting.
- Special Note About Quorum Requirements: A “ quorum” refers to the number of members of a body or group required to be present in order to transact the business of the body or group.
- Prepare Minutes of Meeting.
