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The Annual General Meeting: What do You Need to do?
Public companies in Australia are obligated to hold an annual general meeting once every year — but what is an AGM, and what does your business need to do to meet to prepare for the meeting?
Every year, your company must hold an Annual General Meeting (AGM) in which company directors and members meet and discuss company affairs. AGMs function as a forum in which everybody involved with a company has the opportunity to participate in the company decision making process and share information.
There are a number of requirements you must meet when holding an AGM in order to ensure you’re compliant with the law. We’ll proceed to break down exactly what you need to do at an AGM to make sure your company is following the rules.
Does My Company Have to Hold an Annual General Meeting?
Public companies in Australia with more than one member are required by the Corporations Act 2001 (Cth) to hold an Annual General Meeting once every calendar year. There’s no legal requirement for private companies to hold an Annual General Meeting, but it’s a good idea to do so — an AGM is a great opportunity for a company & its stakeholders to review progress toward goals and discuss strategic initiatives.
What Are the Requirements for an AGM?
If you’re obligated to hold an AGM, then you’ll need to ensure your AGM meets a number of requirements. Annual General Meetings must be held within a specific time frame from registration, must have a minimum number of members present, provide an opportunity for questioning, discuss specific business matters, and give a certain amount of notice.
The director of a publicly traded company is required to hold an Annual General Meeting within 18 months of the date the company is first registered with ASIC and at least once every year thereafter. It’s important to note that Annual General Meetings must be held within five months of the end of the financial year for a company.
What are Quorum Requirements?
The Corporations Act 2001 (Cth) specifically dictates that an AGM must meet a minimum quorum standard. In this context, the quorum refers to the number of company members present. In order to remain compliant, a company must ensure that there are at least two company members present for the entire duration of the meeting, including proxies, to meet quorum requirements. A company constitution, however, can specify an alternative quorum requirement.
- A company is required to present specific documents at an AGM. These documents are:
- The annual company financial report;
- A director’s report; as well as
- An auditor’s report.
Auditors and Questions
The chair of an Annual General Meeting is required to provide company members with the opportunity to present questions. Members must be able to comment on and question company management or remuneration reports, as well as question auditors.
The company’s auditor is entitled to attend the Annual General Meeting. All voting members present at an AGM must be provided with the opportunity to submit written questions to the company auditor. These questions must be submitted in writing, at least five days in advance of the AGM and must be relevant to the report under consideration.
The company is required to pass submitted questions to the company auditor so that they may be addressed, as well as make a copy of all questions available to AGM attendee members either before or during the AGM.
- The business addressed at an AGM can include:
- The annual company financial report;
- The director’s report;
- An auditor’s report;
- The passing of resolutions; and
- The appointment of company auditors and their remuneration.
Unlisted public companies are required to provide a notice period of 21 days before an AGM. Listed companies, however, must provide 28 days notice. A company may hold an AGM on shorter notice if all company shareholders agree, or if the constitution of a company stipulates shorter notice periods.
What if my Company Can’t Hold an AGM?
- The Australian Securities and Investments Commission is strict regarding Annual General Meeting compliance. If your company can’t hold an AGM in a given year you’ll need to apply to ASIC for an extension, which will allow you to hold an AGM at a later date. ASIC typically grants AGM time frame extension in the following scenarios:
- Circumstances that are not within the company’s control prevent an AGM from being held; or
- Extending the time frame in which an AGM must be held is in the best interests of the members of a company
All companies in Australia must comply with the Corporations Act, which means holding an Annual General Meeting. While holding an AGM is a legal requirement, it’s also an opportunity for your company to ensure all members are in alignment regarding the current performance and future goals of your company.