In India, both Limited Companies and Private Limited Companies are required by law to hold an Annual General Meeting when the management and the shareholders gather once a year to discuss matters related to the company. An annual general meeting must be held in accordance with the Companies Act in order to discuss the annual results, the appointment of the auditor, and other matters. To conduct the AGM, a company must comply to the Act’s provisions.
Agendas in Annual General Meeting
AGMs are required to be held annually by all companies, regardless of whether they are public or private limited, with or without share capital, or unlimited companies. The company’s shareholders and directors conduct an annual meeting known as the annual general meeting. The Company’s audited financial statements and the appointments of auditors and directors are approved at the Annual General Meeting. Compensation for officers, approval of proposed dividends, and any other matter brought up by shareholders are additional issues that might be considered during an AGM.
The items discussed or business done at an AGM includes:
• Examining and adopting the financial statements that have been audited.
• Examining the director’s and the auditor’s reports.
• The announcement of dividends to shareholders.
• The appointment of new directors to take the place of departing ones.
• Selecting auditors and determining their compensation.
• In addition to the aforementioned regular business, the corporation may perform any other business as a special business.
There are two types of resolutions pass in AGM, which are followed: –
Ordinary Resolution:
An ordinary resolution will be passed to pre-form the company’s ordinary business transaction.
Special Resolutions:
A Special Resolution will be passed to perform the company’s special business transaction.
Depending on the relevant legal provisions, the resolution may be approved as either an ordinary resolution or a special resolution. A special resolution needs to receive at least 75% of the vote to pass and an ordinary resolution need to receive at least 50% of resolution favorable votes.
Quorum for an AGM
The minimum number of members shall be present in a meeting is referred to as a “quorum”
A Private company’s annual general meeting (AGM) requires a quorum of two members to be present.
The quorum in the case of a Public Limited company is:
- If there are less than or equal to 1,000 members, there are five members present.
- If the number of members is greater than 1,000 but less than 5,000, fifteen members must be present at the meeting.
- In the numbers of members are more than 5,000, thirty members must be present at the meeting.
- The meeting will be postponed to the same day and time the following week if the required number of attendees is not present within 30 minutes of the scheduled start time.
In Case of Public and Private Company
An AGM should only be held between the hours of 9 a.m. and 6 p.m. during business days. Any day that is not a public holiday, including holiday declared by the Central Govt, may be used for the meeting. Any location that is within the boundaries of the city, town, or village where the registered office is located may be chosen for the meeting.
In Case of Government Companies
The Central Govt may select any location for a government company to host its AGM. After receiving written or electronic authorization from its members, an unlisted business may conduct an AGM anywhere in India.
Minutes of Annual General Meeting
A minute’s book is a book kept in physical or electronic form for the purpose of recording minutes. Minutes are a formal written record, in written form, of the activities of a meeting.
The AGM’s proceedings will be recorded by the company secretary. If there is no Company Secretary, the proceedings will be recorded by any other person who has been properly authorized by the Board or the Chairman.
Every company to ensure that the minutes of every general meeting of any class of shareholders or creditors, as well as every resolution passed in AGM meeting of its Board of Directors or board committee, are prepared, signed, and kept in books kept for that purpose within 30 days of the conclusion of each such meeting concerned.
Who Can Participate in Annual General meeting
Attending and participating in the AGM are open to all of the company’s members, including shareholders. Members have a choice of physical, postal, or electronic voting methods. Members may designate proxies to represent them at AGMs and cast votes. The member must sign the proxy form and the appointment of the proxy must be made in writing.
When a company shareholder designates a proxy, the proxy form must be signed by that company shareholder. The meeting’s chairman may be chosen by the members themselves. However, if a chairman is appointed by the company’s articles of association, that person will preside over the AGM.
Attending the AGM and participating in shareholder voting can provide investors with a sense of ownership and control over their investments. However, without a solid understanding of the stock market and the company’s financials, shareholders may struggle to make informed decisions. Any Stock market institute can help investors build this knowledge and ensure that they are well-equipped to participate in events like the AGM.
Methods of voting in Annual General Meeting
General Consent : This form of voting can be used to shorten a meeting and the voting procedure for routine issues like minutes or items that everyone seems to support.
Are there any objections, member may say, Hearing no objections, if none are raised.
Voice Vote : Participent respond to the question by verbally saying “yes” or “no” in accordance with the method of voting.
Those who agree say “yes,” and those who disagree, “no.”
Show of Hand : Voting procedure where participants raise their hands to indicate their preference. If you want to be sure that the results are accurate, you should only employ this method in limited gatherings where everybody can see one another.
Postal Ballot : Voting online or using any other electronic method. The goal of introducing this method is to build a “corporate democracy” culture and make it easier for shareholders to vote without personally being present at the general meeting.
Roll Call Vote : Each member’s vote is recorded. The Secretary calls the name of each member, who then expresses vote by saying “yes,” “no,” or “pass.” A member may cast a vote before the results are made public if they say “pass.” The vote is then recorded by the secretary and is kept in the records.
Conclusion
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