What is an AGM and how to Hold it for a Singapore Company?

Singapore company law mandates all companies (both private and public companies) to hold AGMs where shareholders issue resolutions for approval.

What is an AGM and how to Hold it for a Singapore Company?

Singapore company law mandates all companies (both private and public companies) to hold AGMs where shareholders issue resolutions for approval.

Under Section 175 of the Singapore Companies Act (CA), an annual general meeting (AGM) is a mandatory meeting of company shareholders to present the company’s financial statements. It is an ideal platform for the shareholders to raise queries on the financial performance of a business and address their concerns on business health.

A company is required to declare the date of its AGM to ACRA while it files the company’s Annual Return on BizFile+. If a company is exempted from holding of AGM then it must submit the details for such exemption during the filing of annual returns.

Shareholders with voting rights can vote at an AGM and can participate in making company decisions on current issues including the appointment and removal of directors, selection of auditors, executive compensation etc.

When Should a Singapore Company Hold its AGM?

For listed companies, an AGM must be held within four months after the financial year-end (FYE) and annual return filing must be done within five months after FYE
For non-listed companies, holding of an AGM must be done within six months after the FYE and these companies need to file their annual return within seven months after FYE
The FYE date falls on the anniversary day previously notified to the registrar and if not notified early, should be the anniversary day of the company’s incorporation
Companies must hold their AGM within 6 months of the financial year end

The above-mentioned AGM deadlines apply to a company that is not exempted from holding an AGM or has not dispensed with the holding of an offline AGM.

What are the Criteria for Exemption from Holding AGMs?

Private companies meeting the criteria specified in Section 175A of CA may not require to hold an AGM if

The company sends its financial statements to all members within 5 months after the FYE; or
The company sends its financial statements to all members within 5 months after the FYE; or
An AGM should be held if a member requests for it by notifying the company not later than 14 days before the end of the 6th month after FYE; and
An AGM should be held if any member or auditor of the company gives notice to the company within a maximum of 14 days after the financial statements are sent out to require such a general meeting to be held

As per section 175A of the CA, a private company, by resolution, may dispense with the holding of AGMs. The resolution, however, is to be voted by all company members either in person or through their proxies.

What is the Updated Guidance on Holding of AGM in Pandemic Situation from Singapore Regulatory Authorities?

On 4th February 2022; ACRA, the Monetary-Authority-of-Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) announced updated guidance allowing companies to hold AGM electronically ending the mandatory requirement of traditional offline AGM. This guidance will be in force till such time it is not amended or revoked by the Ministry of Law.

What Business Transactions are done in an AGM?

The matters discussed and business transacted in an AGM consists of the following

What is the Procedure of Holding an AGM?

The company members must be given a 14 days’ notice before holding the AGM. The venue, the date and day of the meeting, the meeting time must be mentioned in the notice. The notice also needs to mention the business to be conducted at the AGM and the right of a member to appoint a proxy if he or she is unable to attend the company meeting subject to a maximum of two proxies.

The notice is normally sent electronically to the e-mail address of the member as per the records of the company by the company secretary. The notice must also be given on the website of the company. Copies of the director’s and auditor’s report, financial statements, and the balance sheet are also sent within this 14 days notice period.

If a special resolution requires to be passed in AGM, a notice must be given at least 21 days before. In case of any special notice e.g. removal of directors or auditors before completion of terms, that needs the shareholders to propose a resolution, the notice must be given at least 28 days before the meeting.

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What is Shareholder Resolution?

A resolution is how the shareholders of a company make a decision. Once passed, a resolution means that the shareholders agree to a proposal. The Singapore Companies Act needs at least a 75% majority decision for special resolutions and not less than 50% simple majority decision for ordinary resolutions unless specified otherwise in the Company Constitution.

Can a Singapore Company Apply for an Extension of Time to hold an AGM?

Yes, a company can apply for an Extension of Time (EOT) to hold an AGM should it decide to delay convening the AGM or filing the Annual Return. The EOT application costs SGD 200 and can be done through the below-mentioned steps.

Company executives e.g. the director, company secretary or a professional firm, on behalf of the company, can make an EOT application. The application must be made before the AGM/AR deadline and generally requires 14 working days for processing by ACRA.

What are the Penalties for not holding an AGM?

If a company fails to hold an AGM on time, penal actions may be initiated by ACRA against the company and its directors. Under section 175, the directors failing to adhere to AGM requirements can be prosecuted in court, and may even be disqualified or debarred from being a director. Any breach in conducting AGM can also attract monetary sanctions from ACRA as composition fines and the details can be found on this link.

How the Outcome of an AGM is Recorded?

Every company must prepare the minutes of the AGM as a written record of the proceedings of the meeting detailing the events and the resolutions passed. The Company Secretary usually records the proceedings of the AGM. In his or her absence, any other person duly authorised by the Board or by the Chairman can record the proceedings. The minutes must be signed by the Chairman and entered in the minute book.

Conclusion

The yearly procedure of an AGM is vital for a business to become competitive and sustainable. The Chairman’s speech and management commentary provide the future direction of company and business growth projections and help in enhancing the confidence of investors. It is, however, recommended that a professional corporate service provider is hired to assist you in holding an AGM as several regulatory obligations are involved.

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What is an AGM and how to Hold it for a Singapore Company?

What is an AGM and how to Hold it for a Singapore Company?

What are the Criteria for Exemption from Holding AGMs?

What Business Transactions are done in an AGM?

Want to learn more about AGM?

What is Shareholder Resolution?

What are the Penalties for not holding an AGM?

How the Outcome of an AGM is Recorded?

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