Understanding Annual General Meetings (AGMs) in Singapore for Business Owners

As a business owner in Singapore, it’s essential to understand the concept of Annual General Meetings (AGMs) and their significance in the corporate world. AGMs are a fundamental aspect of company governance, and this article will provide you with all the information you need to know about them.

What is an AGM?

An Annual General Meeting, abbreviated as AGM, is a mandatory yearly gathering of a company’s shareholders and directors. It serves as a platform for key corporate decisions, such as approving financial statements, declaring dividends, re-electing directors, and more.

When Must a Company Hold its AGM?

The timing of AGMs in Singapore varies depending on the type of company:

1. Public-listed companies must hold their AGM within 4 months after their financial year end (FYE).
2. Non-listed companies should conduct their AGMs within 6 months after their FYE.

Your company’s FYE date is typically the anniversary of the FYE date previously notified to the Registrar. If this information is unavailable, it’s considered the anniversary of your company’s incorporation date.

What Matters are Presented During an AGM?

AGMs cover various crucial matters, including:

1. Presentation of company’s financial statements: Shareholders review and approve the financial statements for the previous fiscal year.
2. Dividend declaration
3. Retirement and appointment of directors
4. Approval of director’s fee
5. Retirement and appointment of directors
6. Appointment of auditors
7. Authorisation to issue shares

Can an AGM Be Held Virtually?

Yes, AGMs can be held virtually. This flexibility has become more common, especially with the impact of the COVID-19 pandemic. Holding a virtual AGM allows shareholders to participate remotely and is a convenient alternative to in-person meetings.

How to File an AGM in Singapore

To hold a successful AGM, follow these steps:

1. Provide written notice: Send a notice containing AGM details at least 14 days before the AGM date. Include the date, time, venue, resolutions, and information about appointing a proxy.
2. Distribute documents: Share financial statements, balance sheets, director’s reports, and auditor’s reports with shareholders during this period.

Exemption from Holding AGMs

Private companies may be exempt from holding AGMs if they send their financial statements to members within 5 months after the FYE. Certain conditions apply, such as member requests and director obligations.

Dispensation with AGM

Private companies can pass a resolution to dispense with AGMs if all members agree. However, some obligations remain, such as preparing financial statements and circulating AGM-related resolutions.

Appointing a Proxy to Attend an AGM on Behalf of a Shareholder

Shareholders can appoint a proxy to represent them at AGMs, with a maximum of 2 proxies per shareholder. The proxy doesn’t need to be a company member.

What Happens If a Company’s Financial Statements are Not Ready in Time?

Companies unable to hold AGMs within the prescribed timeframe can apply for an extension of time (EOT) through ACRA. Public-listed companies need to provide reasons, supporting documents, and SGX comments for the EOT application. There is a minor fee associated with this process.

Post-AGM Matters After an AGM

The company must record meeting minutes, file Annual Returns, and verify various company details with ACRA.

Penalties for Failing to Hold an AGM in Singapore

Failure to hold AGMs may result in penalties. Companies and directors may face fines or prosecution. Late lodgement fees apply for overdue annual returns.

Summary

AGMs are a crucial part of running a business in Singapore, ensuring transparency, accountability, and proper corporate governance. By understanding the requirements and procedures associated with AGMs, business owners can navigate these annual obligations more effectively, ultimately contributing to the success and compliance of their companies.

Time is money. Let the pro team at Counto take care of your compliance. Speak to us directly on our chatbot, email us at [email protected], or contact us using this form.

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