Running a company requires navigating a complex array of rules and regulations, which can often feel overwhelming.
To simplify this process, we’ve created this guide on conducting an Annual General Meeting (AGM). This article will clarify your rights and obligations as a company, ensuring compliance and a smooth AGM experience.
What is an Annual General Meeting?
An Annual General Meeting (AGM) serves as a vital platform for the company’s members or shareholders to stay informed about its financial and operational activities. AGMs promote transparency and accountability by allowing members to question directors and auditors and vote on essential company matters. They are legally required for public companies, ensuring shareholders are updated on the company’s progress.
Review Your Constitution
Start by checking your constitution for specific timelines and processes related to holding your AGM. This foundational document will provide essential guidance on how to conduct the meeting and outline the rights and responsibilities of all participants.
When Must an AGM Be Held?
Under Division 8 of the Corporations Act 2001 (Cth), public companies in Victoria must hold an AGM within 18 months of registration. AGMs must occur at least once per calendar year and within five months of the end of the financial year. For companies with a financial year ending June 30, the AGM must be held by the end of November.
Notice of AGM
The company must notify all members, directors, and auditors of the AGM. This notice is crucial for ensuring all relevant stakeholders are informed and have adequate time to prepare.
Notice Content Should Include
- Date, time, and location (or virtual link) of the AGM
- General nature of the business to be conducted
- Details of any resolutions to be considered (e.g., appointment of directors or approval of the annual financial report)
- Instructions for appointing a proxy if members cannot attend
Information for Members Before the AGM
Before the AGM, provide members with key reports to review the company’s financial performance and operations. These should include:
- The annual financial report (including financial statements and notes)
- The directors’ report (covering operations and outlook)
- The auditor’s report, if applicable
Conducting the AGM
The AGM must be chaired by an individual designated in the company’s constitution. The chairperson is responsible for overseeing the proceedings, ensuring all agenda items are discussed, and maintaining order during the meeting.
What Does an AGM Typically Involve?
AGMs typically begin with a welcome and the approval of the previous meeting’s minutes. The agenda may include:
- Reports showcasing the organisation’s activities and achievements over the past year
- Recognition of any individual members’ contributions
- Presentation of financial reports and results
- Discussion of any proposed constitutional amendments
- Election of board members or officers
Nominations for Office Bearers
During the meeting, nominations should be solicited from the attendees for positions such as chair, deputy chair, secretary, treasurer, and board members. If there are multiple candidates for any role or if the number of nominations exceeds the available positions, a formal election will need to take place. Elections can be conducted through a show of hands or via secret ballot, depending on the governing rules or the decision of the chair.
Allowing Members to Ask Questions
The chairperson must provide a reasonable opportunity for members to ask questions about the company’s management and financial reports, as outlined in Section 250S of the Act. If the auditor is present, members should also be allowed to inquire about the audit process and the auditor’s report, per Section 250T.
Quorum
The quorum is defined in your constitution and specifies the minimum number of members required for valid decision-making. It is crucial to ensure that the meeting is legally constituted to avoid any disputes over the legitimacy of decisions made.
Voting at the AGM
AGMs often involve voting on significant company matters, such as:
- Adopting the annual reports
- Electing or re-electing directors
- Appointing or re-appointing the auditor
Voting Methods
Voting may occur via a show of hands, poll, or electronically (for online meetings). The company’s constitution typically dictates the voting method, and if the outcome is contested, a poll may be required.
Proxy Voting
Members unable to attend can cast their votes via proxies. Ensure all proxies are collected and counted before announcing results.
Declaring Results
Once voting concludes, the chairperson must declare the results. If a poll is conducted, results may be announced later due to the time required for counting.
Documentation
Ensure that minutes are drafted shortly after the meeting to record decisions and discussions. These minutes should include all motions passed, questions raised, and the results of any votes.
Conclusion
Conducting an AGM is crucial for maintaining corporate governance and accountability to shareholders. By adhering to statutory requirements and encouraging member participation, companies can ensure their AGM serves its intended purpose while remaining compliant with the law. Always consult your constitution and the Corporations Act 2001 (Cth) for specific procedural requirements.
And as always, please get in touch with Warlows Legal today if you require any assistance.
