Holding Annual General Meetings(AGM) and Filing of Annual Return(AR)
In reference to the Companies Act, an AGM(Annual General Meetings) is a mandatory annual meeting of shareholders. At the AGM, your company will present its audited financial statements (also known as “accounts”) before the shareholders (also known as “members”) so that they can raise any queries regarding the financial position of the company.
As per Section 68 of the Companies Act 2016, a company shall lodge with Registrar an AR(Annual Return) for each calendar not later than thirty days from the anniversary of its incorporation. An AR of the company consists of the following information:
(1) Registered office address
(2) Business office address
(3) Branch office address
(4) Principal business activities
(5) Total authorised capital registered
(6) Total paid-up capital
(7) Charges registered with SSM (i.e. company assets pledged)
(8) Particulars of company directors, managers, secretaries and auditors
(9) Appointed company secretary
(10) List of shareholders
The general process of an AGM and AR
During an AGM, the company presents its audited financial statements to members and answers any queries on the business.
AGMs are conducted under the direction of the chairman of the meeting, who is usually the chairman of the board of directors. If your company’s Constitution does not specify a chairman to regulate the meeting, any member can be elected at the AGM to fulfil the role.
The company secretary or an appointed secretarial service – will be required to prepare any necessary documentation for the AGM (e.g. the company Constitution).
Please note the following when conducting your AGM.
1. Other than ordinary business, the meeting should only deal with resolutions for which notice has been given.
Ordinary business is defined in your company’s Articles and may include subjects such as:
• Dividend pay-outs
• Appointment of directors/auditors
• Remuneration for senior executives and directors
• Consideration of accounts and balance sheets
Subjects other than these may be considered a special business. Any resolutions at the meeting, other than ordinary business, should have been mentioned in the Notice of the AGM. If you vote on a topic that was not mentioned in the notice, the resolution may not be legally valid. This is because a member with voting rights may be absent during the meeting, and do not know the matter.
Note that members also have the right to propose resolutions for the meeting. However, they must bear the expense of circulating such resolutions.
2. Make sure you meet the quorum.
The quorum is the minimum number of members who must attend the AGM, for it to be considered valid. If the quorum is not specifically stated in your company’s Constitution, the minimum number is two members (or their proxies).
3. Ensure proxies are properly appointed.
A proxy can attend and vote on behalf of a member at the AGM. The proxy does not need to be a member of your company.
The procedure for appointment of a proxy should be in your company’s Constitution; the procedure may be applicable for all meetings, or only for the current meeting. Ensure that the procedures have been followed by members using proxies.
4. Ensure the proper laying of accounts.
Directors are responsible for presenting documents such as:
• Financial statements • Balance sheets • Director’s report • Auditor’s report(if applicable)
These materials should also be sent with the Notice of the AGM, at least 14 days prior to the meeting. This will allow members to prepare questions for the directors.
5. Ensure proper voting on various resolutions.
Your company’s Constitution covers the voting rights of members, as well as the procedures for voting.
Usually, all members have the right to vote, barring exceptional circumstances (e.g. a member who has not paid up for shares issued to them, when notified by the company, may be denied the right the vote).
Voting is done by a show of hands or a poll, but note that proxies are usually not allowed to vote by a show of hands unless the company’s Constitution allows this.
6. Closing your AGM.
The minutes of the AGM must be recorded in writing and signed by the company chairman. The company must then file its AR.
Timeline for holding AGM and AR filing
• If you are a listed company, you must hold an AGM within 4 months after your company’s financial year-end and file the AR within 5 months after your company’s financial year-end.
• If you are not a listed company, you must hold an AGM within 6 months after your company’s financial year-end and file the AR within 7 months after your company’s financial year-end.
*Source: Companies Commission of Malaysia