As a compliance requirement, one of the responsibilities of a company secretary in Singapore is to hold an annual general meeting (“AGM”) after the financial year end (“FYE”) on an annual basis.
The AGM in Singapore is an important opportunity for all shareholders to participate in the company’s decision-making process. It’s a chance for shareholders to stay informed about the company’s business performance and to ask questions about the company’s financial situation.
In this article, we’ll explore why it is important for companies to hold an AGM in Singapore, as well as everything else you need to know to stay compliant.
What is an AGM in Singapore?
The annual general meeting (“AGM”) is compulsory for companies in Singapore to hold every year. During the AGM in Singapore, the company is required to present the financial statements to shareholders.
This allows shareholders to inquire about the financial position and health of the business, making it an important opportunity to address their concerns. According to Singapore law, all companies are required to hold their AGM in Singapore every year.
The purpose of this requirement is to promote transparency and accountability, as it provides an opportunity for shareholders and stakeholders to gather and receive updates on the company’s current situation and other concerns.
During the AGM in Singapore, the company’s financial statements and other important reports are presented and discussed, allowing for greater understanding and involvement among participants.
This requirement also serves as a means of ensuring that companies are operating within legal and ethical boundaries, while also promoting good corporate governance practices.
In addition to declaring the AGM date to the Accounting and Corporate Regulatory Authority (ACRA) upon filing the Annual Return on BizFile+, it is also important to ensure that the date is communicated to all relevant stakeholders, including shareholders and board members.
By keeping all interested parties informed, the company can ensure a high level of attendance and engagement during the AGM, which is crucial for making important decisions and driving the business forward.
Objectives of holding an AGM in Singapore
The main purpose of the AGM is to ensure that the business is compliant with legal requirements, such as presenting financial statements and appointing a new auditor.
During the AGM, important decisions are also made to protect the company’s well-being and shareholders are kept informed about operations. Here are the two main objectives of holding an AGM in Singapore:
Presentation of financial statements
During the AGM in Singapore, the company is required to present financial statements to all shareholders that provide a precise and impartial evaluation of the company’s financial performance over the course of the year.
Once the financial statements are presented, they must be adopted and approved by the shareholders. It should be noted that privately held companies are allowed up to six months following the FYE to present their financial statements at the AGM.
Approval of business transactions
During an AGM in Singapore, companies commonly seek approval from shareholders for various business transactions. These may include declaring dividends, electing directors by vote, appointing auditors for the following calendar year, and authorizing the issuance of shares.
Procedure for carrying out an AGM in Singapore
At an AGM in Singapore, the company presents its financial accounts and addresses any questions from members. The person who usually serves as the chairman of the board of directors leads the AGM as the chairman of the meeting.
If the Constitution of the company does not indicate who should preside over the meeting, any other member may be assigned to this role during the AGM. The corporate secretary or a secretarial service is responsible for creating any required documentation for the AGM.
When conducting an AGM in Singapore, it is important to keep in mind the following considerations:
1. During an AGM in Singapore, only resolutions for which notice has been provided should be considered, apart from ordinary business defined by the company’s constitution.
The company’s constitution specifies what constitutes ordinary business, which may include items such as dividend payouts, accounts and balance sheets, and appointment of directors and auditors.
Any resolutions passed during the AGM that are not related to routine business should have been stated in the AGM Notice and are considered special business.
2. Ensure that the quorum is met
The quorum refers to the least number of members that must be present at the AGM to validate it. If a quorum is not specified by the company’s Constitution, at least two members (or their proxies) must be present to meet the minimum requirement.
3. Make sure that proxies have been appointed correctly.
At an AGM in Singapore, it is permissible for a proxy to represent a member and cast votes on their behalf. The company’s Constitution should specify the mechanism for appointing a proxy, which may apply to all meetings or only the present one.
It is important to verify that members who utilize proxies have followed the instructions.
4. Make sure that the documents are laid out correctly
It is the responsibility of the directors to present important documents during the AGM such as balance sheets, financial statements, and the auditor/director’s report.
These documents must also be provided to all members at least fourteen days before the meeting to allow them to prepare any questions they may have for the directors.
5. Make sure that various resolutions are voted on correctly.
As per the company’s Constitution, members are entitled to vote, unless there are exceptional circumstances such as non-payment of issued shares. Voting can take place via a poll or show of hands.
However, proxies are typically not authorized to do so via show of hands, except for when it is permitted by the Constitution.
6. Wrapping up the AGM
After the AGM in Singapore, the company secretary takes notes and prepares the minutes, which are then reviewed and signed by the chairman of the board. Finally, the company secretary files the Annual Returns through BizFile+.
Which companies are exempted from conducting an AGM in Singapore?
Private companies in Singapore have been eligible for exemption from AGM requirements since August 31, 2018, provided they deliver the financial statements to their members within five months after the FYE.
However, there are certain safeguards that need to be followed in order to qualify for this exemption.
- To request an AGM in Singapore, a member should inform the company at least 14 days prior to the end of the sixth month after the FYE
- If any member of the company notifies the directors, they are required to conduct an AGM within 6 months after the FYE. If the company is unable to hold the AGM within the specified deadline, they may request an extension of time with the Registrar.
- Private companies are obligated to hold an AGM to present financial statements if requested by an auditor or a member. Directors are obligated to abide by the request and hold the meeting within 14 days of distributing their financial statements.
Private dormant relevant companies that are exempted from preparing financial statements are not required to conduct an AGM in Singapore, as long as they comply with the safeguards outlined above.
A private dormant relevant company is considered one if it is dormant, has total assets that are equal to or less than $500,000, and is not listed nor a subsidiary of a listed company.
How will companies who fail to hold an AGM in Singapore be penalized?
It is mandatory for all businesses in Singapore to comply with the laws and procedures of ACRA and the Companies Act.
Company officers who do not comply with the requirements for holding an AGM and submitting an annual report may be subject to fines and/or judicial proceedings imposed by ACRA.
If directors fail to comply with the requirements for holding an AGM, they may be prosecuted in court and disqualified from being a director.
In addition, companies that do not hold the required AGMs may face composition fines imposed by ACRA. A penalty for late lodgment is also applied to every annual return that is submitted after the deadline.
How we can help – Our Incorporation Service
Holding an AGM in Singapore is not just a legal requirement, but also an important opportunity for companies to promote transparency, accountability, and good corporate governance practices.
By presenting financial statements, seeking approval for various business transactions, and addressing shareholders’ concerns, companies can ensure that all stakeholders are informed and involved in the decision-making process.
If you need help with ensuring compliance with ACRA requirements or handling the necessary documentation and filings for your AGM, Premia TNC can assist you every step of the way.
As a provider of corporate secretarial services, Premia TNC can help you ensure compliance with ACRA requirements by managing the necessary documentation and filings for your AGM.
We can also offer guidance on the procedures to follow during the meeting and help ensure that all stakeholders are informed and involved in the decision-making process.
By working with us, you can rest assured that your company will remain compliant and that your AGM will be a success.
If you’re interested in working with our team of experts, you can learn more about our complete range of corporate secretarial services or get in touch with us for a FREE consultation.
AGM In Singapore – Frequently Asked Questions
1. What is the process for sending an AGM notice in Singapore?
When an AGM is convened, a written notice must be sent to all members, including official assignees overseeing the affairs of bankrupt members, and other individuals specified in the constitution of the company.
A notice period of at least 14 days is required, but the Constitution of the company may allow for an extension. It is possible to reduce the length of the notice period if the members agree, as they have the right to attend and vote
2. Is it mandatory to hold an AGM in Singapore?
All companies are required to hold an AGM in Singapore every year to update their shareholders on the company’s business health. The AGM is mandatory and an important opportunity for shareholders to participate in the company’s decision-making process.
This holds true unless the company is exempted and follows all the requirements in relation to its exemption.
3. Who is eligible to be the chairman of an AGM in Singapore?
The usual practice in Singapore is for the chairman of the board of directors to also serve as the chairman of the AGM. If the Constitution of the company does not specify one to preside over the meeting, any member can be elected to fulfill the role.
4. Which companies in Singapore have no obligation to hold an AGM?
Private companies may be exempted from AGM requirements, as long as they distribute the financial statements to their members within five months from the financial year-end.
5. What is the timeline for holding AGMs for Singapore companies?
For listed companies, the AGM in Singapore must be held within four months after the FYE. Non-listed companies must hold AGMs within six months after the FYE.
6. How to apply for an extension to hold an AGM in Singapore?
An extension of up to 60 days can be requested in Singapore to defer the conducting of an AGM in Singapore or filing of the annual return. The company officer, such as the secretary or director, can apply for the extension through BizFile+, which costs S$200.
7. Is it possible to hold an AGM virtually?
Yes. Virtual AGMs have become more common due to the COVID-19 pandemic, replacing the traditional in-person meetings.
8. What is the dispensation of AGM in Singapore?
According to Section 175(A) of the Singapore Companies Act, private limited companies may choose to forgo an AGM if a unanimous written resolution is approved by shareholders and members.
Instead, written resolutions addressing all topics that would have been covered during the AGM should be delivered to every member, provided that the decision to dispense with the AGM has been approved.
However, certain obligations still apply after the dispensation of the AGM.
This includes preparing financial statements for the company at the end of each fiscal year, sending financial statements and other documents to shareholders, and circulating AGM-related resolutions that have been approved in writing by shareholders.
9. What should a dormant company do in regard to holding an AGM and filing its annual return in Singapore?
Even dormant companies in Singapore still need to comply with ACRA requirements.
This means that they are required to prepare their accounts in accordance with Singapore Financial Reporting Standards (SFRS), hold an AGM, and file their annual return within the prescribed time period.
10. What is presented during an AGM in Singapore?
At an AGM in Singapore, the company presents the financial accounts to members and addresses any questions. Matters presented may include adopting accounts, declaring dividends, approving director’s fees, re-electing directors, and re-appointing auditors.
