An Annual General Meeting (AGM) is a meeting where company members and directors meet to discuss the company’s affairs. It gives all individuals involved in the company the opportunity to participate in company affairs. Further, it provides a forum to share information, discussions and decision-making. It is important to comply with the associated requirements to ensure your company adheres to the law.
Do I Need to Hold an AGM?
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. Additionally, there are some exceptions for newly established companies, depending on the time of establishment compared to the end of the most recent financial year.
What are the Requirements for an AGM?
If your company must hold an AGM, there are requirements you will need to follow for the meeting to comply with the Corporations Act.
Timing
If you are the director of a public company required to hold an AGM, you must hold it within 18 months after registration, and at least once every calendar year. You must also hold the AGM within five months of the company’s financial year-end. This is a strict liability requirement, meaning that you are not exempt from this requirement simply because you were not aware of your obligations.
Quorum
The quorum of a meeting is two members (unless the company constitution specifies another number) and that quorum must be present at all times during the meeting (including proxies).
Documents
Documents that the company must present at the AGM include the:
- Company’s annual financial report;
- Directors’ report; and
- Auditor’s report.
Questions
The chair of an AGM must allow members to have an opportunity to ask questions or make comments about company management, the remuneration report, and to auditors.
Auditor
The company’s auditor is entitled to attend the AGM. Any member who can vote at the AGM may submit a written question to the auditor. However, a member must submit their question at least five days before the AGM and ensure it relates to the report being considered. The company will pass on the question to the auditor for the auditor to address. The company must make a copy of all questions available to the members attending the AGM either before, or at, the AGM.
Business
The business of an AGM may include the consideration of:
- The annual financial report;
- Directors’ report and auditor’s report;
- The election of directors;
- Passing resolutions; and
- The appointment of the auditor and the fixing of their remuneration.
Notice Periods
There is a requirement for unlisted public companies to provide 21 days notice of an AGM, whereas a listed company must give at least 28 days notice. However, a company can call a meeting on shorter notice if the company’s constitution stipulates so or if all shareholders agree.
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If you are unable to hold your AGM in any given calendar year, you may apply to the Australian Securities and Investments Commission (ASIC) to extend your time in which you can hold your AGM. It is best to apply as early in advance as possible. ASIC will usually on grant an extension where:
- There are circumstances out of the company’s control that make an extension necessary; or
- An extension is in the interests of the members of the company.
If you are a company director, complying with directors’ duties are core to adhering to corporate governance laws.
This guide will help you understand the directors’ duties that apply to you within the Australian corporate law framework.
Key Takeaways
If your company must hold an annual general meeting, it must occur at least once each calendar year. Complying with the procedural requirements of an AGM is essential to fulfilling your obligations under the Corporations Act. This includes complying with when to hold an AGM, who must be present and the relevant notice periods.
If you have any questions about holding an annual general meeting, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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