Annual General Meeting (AGM) is a mandatory yearly gathering for a company. Failure to do the AGM, there is a possible consequence of penalty. A company lawyer or secretary must know the process of AGM, timing, notice requirement and possible consequences. The article will focus on the mandatory requirement of requirements under the Company Act 1994.
Annual General Meeting (AGM)
- 1 Annual General Meeting (AGM)
- 1.1 Procedures of an Annual General Meeting (AGM)
- 1.2 Timing for Annual General Meeting
- 1.3 Notice for Annual General Meeting
- 1.4 The quorum for Annual General Meeting
- 1.5 Documents Required for AGM
- 1.6 Questions
- 1.7 Audit
- 1.8 Registration of copies of special and extraordinary resolution
- 1.9 Penalty for delaying holding AGM
- 1.10 Legal Advice regarding Annual General Meeting by CLP:
The Annual General Meeting (AGM) is a yearly gathering of members or shareholders of an organization. It serves as a platform for key stakeholders to come together and discuss important matters relating to the organization’s performance, strategy, and governance. During the AGM, participants receive updates on the organization’s financial performance, elect or reappoint directors, approve financial statements, and address any other matters outlined in the meeting agenda. It allows shareholders to ask questions, voice concerns, and participate in decision-making processes that shape the organisation’s future. The AGM plays a crucial role in fostering transparency, accountability, and engagement among members and shareholders.
Procedures of an Annual General Meeting (AGM)
There are few statutory procedures as per company law. The procedure is as follows:
- Registration of copies of special and extraordinary resolution
Timing for Annual General Meeting
A company has to hold its annual general meeting within eighteen months of the time of its incorporation. Every company in each year, by following the Gregorian calendar, hold the annual general meeting as section 81 prescribes, and it will not be more than fifteen months elapse from the date of one annual general meeting to that of the next year.
Notice for Annual General Meeting
An annual general meeting can be called within fourteen days of notice in writing. A special resolution can be called within twenty-one days of notice. The Board of Directors shall prepare a report and forward that report to every member of the company at least twenty-one days before the meeting will be held. If the report is forwarded after the time duration mentioned in the law, it will be deemed to have been duly forwarded, and no shareholders can put any objections to it. On a special resolution for a valid shareholder’s meeting, the notice must have been submitted within twenty-one days, not less than that.
The quorum for Annual General Meeting
The quorum of a meeting is at least two members, and it must be there at the time of the AGM (proxies included). In public companies, at least 5 members must be present there.
Documents Required for AGM
Documents which must be presented in the Annual General Meeting are;
- Company’s annual financial report
- Auditor’s report
- Director’s report
The AGM chair will allow the shareholders to ask questions regarding the company’s management, remuneration report, and auditors.
The shareholders can ask any questions in writing related to the company’s issues to the auditor at least five days before the AGM or at the time of the meeting. They must send their questions to the board of directors, and if it is related to the company’s matters, then the company will forward them to the company’s auditor. The company’s auditor is entitled to attend the annual general meeting and answer all the questionnaires.
Registration of copies of special and extraordinary resolution
A copy of the resolution shall be printed and duly certified under the signature of any authorized person and submitted to the Registrar to record the same within fifteen days from passing thereof. A copy of the registered article has been annexed to every copy issued after the date of the resolution, if it is not registered, then it shall be forwarded for printing by the payment of fifty taka or such less sum as the company may direct. In terms of any default, a company shall be liable not exceeding fifty taka for each copy. Any willful default by a person in the company shall be punished under Section 88 for that default.
Penalty for delaying holding AGM
If the default is made in terms of holding the annual general meeting at a prescribed time in accordance with sub-section (1) and (2) of section 81 of the Companies Act, 1994, the person and company who is liable for the default will be punishable with fine which may extend to ten thousand takas and in a case of continuing the default, it will be two hundred fifty takas every day after the first day during such default continues.
Legal Advice regarding Annual General Meeting by CLP:
The Barristers, Advocates, and lawyers at CLP in Gulshan, Dhaka, Bangladesh, are highly experienced at assisting clients through the entire process of legal provisions & consequences of the Annual General Meeting of any Domestic and International Companies in Bangladesh. For any queries or legal assistance, please reach us at E-mail: firstname.lastname@example.org
Phone:+8801700920980. +8801947470606. Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.