Annual General Meetings (AGMs) in Singapore: What are They?
An Annual General Meeting (AGM) is a mandatory meeting held by a company to update its shareholders on the business health of the company. The company will present the financial statements to the shareholders and shareholders are then given the opportunity to raise queries on the financial performance of the company. Shareholders get to vote at an AGM and make important decisions for the company such as the appointment of a director, or the removal of one.
This article applies to companies with financial year end (FYE) ending on or after 31 August 2018.
Table of Contents
- When Must a Company Hold its AGM?
- What Matters are Presented During an AGM?
- How to File an AGM
- Exemption from Holding AGMs
- Dispensation with AGM
- Appointing a Proxy to Attend an AGM on Behalf of a Shareholder
- What Happens If a Company Cannot Meet the Deadline to Hold its AGM?
- Post-AGM Matters
- Penalties for Failing to Hold an AGM
When Must a Company Hold its AGM?
Unless the company is exempted from holding an AGM or has dispensed with the holding of an AGM (more on these below), the timelines are:
|Type of Company||When the AGM is to be Held|
|Public-listed||Within 4 months after their FYE|
|Non-listed||Within 6 months after their FYE|
When is a company’s FYE?
For companies incorporated before 31 August 2018, the FYE date of the company is deemed to be the anniversary of the FYE date previously notified to the Registrar. If the Registrar was not notified previously, the FYE date is deemed to be the anniversary of the date of the company’s incorporation.
In its year of incorporation, the company’s financial year period must not be longer than 18 months unless otherwise approved by the Registrar. For companies whose financial year begins on or after 31 August 2018, their financial year period will be taken to be 12 months.
Can a company’s FYE be changed?
Companies are allowed to change their FYE. However, only the FYE date of the current financial year and immediate previous financial year of the company may be changed. This is provided that the statutory deadlines for the holding of the AGM, filing of company Annual Returns, and sending of company’s financial statements have not passed.
How to change a company’s FYE?
Companies must notify and apply to ACRA for approval to change their FYE if:
- There is any change to the company’s FYE that would result in the company having a financial year that is longer than 18 months; and/or
- The FYE of the company was changed within the last 5 years.
What Matters are Presented During an AGM?
Often, companies seek services of a corporate secretarial service firm to prepare the necessary documentation to hold their AGM. One of the documents required is the company constitution.
The company will furnish its profit and loss account for the financial year during the AGM.
How to File an AGM
A written notice containing details about the AGM should be produced and circulated at least 14 days before the AGM, in order to allow all the members to set aside time in their schedules to attend the AGM. The notice should include the date, time and venue of the AGM, details of the resolution to be passed, and notice of a member’s right to appoint a proxy.
Copies of documents such as financial statements, balance sheet, director’s report and auditor’s report should be sent to the shareholders within this period.
Exemption from Holding AGMs
Private companies are exempted from holding AGMs if they send their financial statements to its members within 5 months from the company’s FYE. Dormant private companies that are exempted from having to prepare financial statements are also exempted from holding AGMs.
However, this exemption is subject to certain conditions:
- If a member wants to request for an AGM to be held, they must notify the company to do so. Notice must be given to the company within 14 days before the end of the 6th month after the company’s FYE.
- Directors must hold an AGM within 6 months after the FYE according to the request of that member. In doing so, the company may seek ACRA’s approval for an extension of time (see below) to hold the AGM, if it is needed.
- If any member or auditor requests for the laying of financial statements, private companies must hold an AGM not later than 14 days after the financial statements are sent out for that specific purpose.
Dispensation with AGM
Under section 175A of the CA, a private company may, by resolution, dispense with the holding of AGMs. This is subjected to the resolution being voted by all members of the company in person or through their proxies.
There are some obligations after dispensation of the AGM which include:
- Preparing the company’s financial statements at the end of each financial year;
- Sending the financial statements and other documents (such as the Director’s Report and Statement) to the shareholders; and
- Circulating the AGM-related resolutions which shareholders have passed by written means.
It is important to note that despite the passing of such a resolution, a member of the company can still request for an AGM to be held. This applies as long as the request is made within 14 days before the last day of the 6th month from the company’s FYE.
Appointing a Proxy to Attend an AGM on Behalf of a Shareholder
There will be situations when members are unable to attend an AGM. When a shareholder is unable to attend an AGM, the shareholder is entitled to appoint a proxy pursuant to section 181 of the CA to attend the AGM on behalf of the shareholder.
A member can appoint a maximum of 2 proxies to attend the same meeting. A proxy need not be a member of the company and can be anyone the shareholder chooses to appoint. The proxy form shall be an attachment to the notice of the company.
What Happens If a Company Cannot Meet the Deadline to Hold its AGM?
If a company is unable to hold an AGM within the stipulated timeframe, it is possible for the company to apply for an extension of time (EOT) with ACRA before the due date. The EOT can be applied for by the company officer, such as the director, the secretary or a professional firm on behalf of the company.
There are 2 separate extensions to apply for under sections 175 and 201 of the CA. The company only needs to make an application under either sections. The application for an extension of time is done through an electronic submission via the Bizfile+ platform which can be accessed by a director or officer of the Company, holding a valid SingPass.
However, the extension of time is not indefinite. Companies are allowed a maximum of 2 extensions, each for a period of 30 days.
The processing time for most EOT applications will take up to 14 days. If further clarifications are required, the approval may take up to 30 days.
How to apply for an extension of time
For non-listed companies, the company officer or its representative can apply for the extension via Bizfile+, under its eServices section.
Public-listed companies have to make the application in writing to ACRA, listing the reasons for the application with any supporting documents and also comments from SGX on the application for the EOT.
The application fee costs $200.
Some companies apply for EOT due to a change in the FYE date. If so, the company is required to file a “Notification for Change of Financial Year” via Bizfile+ before lodging the EOT application.
If the company has made an application for EOT under section 175 of the CA without filing a “Notification of Change of Financial Year”, the company has to contact ACRA at firstname.lastname@example.org to request for ACRA to reject the EOT application made. The application fees are not refundable and the EOT application will no longer be valid once rejected. Hence it is prudent to follow the correct steps in filing an application to avoid unnecessary costs.
The minutes of the AGM must be recorded in writing and signed by the chairman. After which, a company must file its Annual Returns. Read our article on filing Annual Returns for more information on this.
Upon filing the Annual Returns, the company will also be required to verify the following information:
- Financial period that the audited accounts have been made up to
- Information of Directors, Company Secretary, Auditors and Shareholders
- Registered charges
- Summary of issued and paid-up share capital
- Company type (i.e. private company, public company, small exempt private company)
- Principal activities
- Registered address
- Company’s full name and registration number
- Accounts in full or partial XBRL format
Penalties for Failing to Hold an AGM
Failure to comply with the requirements for holding an AGM may result in penalties imposed by ACRA. Companies and every director that breach the above-mentioned statutory obligations may be given a chance to compound for the breaches such as paying a composition sum of $300 per breach instead of facing prosecution.
Separately, a late lodgement fee will be imposed at the time of lodgement, for each return that is lodged late.
ACRA will only consider prosecuting the directors in Court if they fail to register and attend the Directors Compliance Programme (DCP) offered to them by ACRA (applicable only for first time offenders); or if they failed to compound the offence when offered a chance to compound; or if ACRA is not prepared to let the directors compound the offence.
There is a 3-tier composition for failure to hold an AGM:
- At stage 1: before summons is issued, ACRA has the discretion to offer a composition fine of $300 per breach.
- At stage 2: after summons is issued, ACRA has the discretion to offer a composition fine of $600 per breach.
- At stage 3: if a Warrant of Arrest is issued, ACRA has the discretion to offer a composition fine of $900 per breach.
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