Annual General Meeting (AGM)
An Annual General Meeting (AGM) is a mandatory yearly event wherein a company updates its shareholders about its financial health. At this meeting, company officers disclose financial statements for shareholder approval, and activities such as director re-election, altering director fees, and declaring dividends occur.
An AGM’s primary goal is to ensure the company’s adherence to compliance measures, including maintaining and presenting financial statements and introducing new auditor(s). It also facilitates important decision-making for the company’s welfare and provides updates regarding company activities.
The meeting’s objectives involve ordinary business, such as sharing audited accounts, voting on Board of Directors membership, appointing auditor(s) for the forthcoming fiscal year, and declaring dividends. Special business objectives involve addressing investor concerns and safeguarding their interests.
According to the Companies Act, Section 175, each private limited company must hold an AGM within six months of the financial year-ending. Companies can request a time extension of up to 60 days, with penalties for non-adherence.
Private companies may opt for offline AGMs under specific conditions, requiring resolutions and adequate advance notices for shareholders. A crucial aspect, the quorum, specifies the minimum number of members to validate the meeting. Quorum requirements vary from a minimum of two members for private companies to thirty for large public companies. Proxy voting is permitted, with certain restrictions. In essence, AGMs are pivotal, obligatory events for corporate transparency and sound governance.