By Sinead Floody, 20th July 2016 (Updated 19th Sept 2019)
The purpose of the Annual General Meeting (AGM) is to allow the members of the company to ask questions, meet the directors, approve the accounts and get information about the company. As the term suggests, the Annual General Meeting (AGM) is held once per year. Chapter 6, Part 4 of the Companies Act 2014 deals with AGM’s for Irish registered companies. The AGM is also the setting where director vacancies can be filled, dividends can be declared and auditors appointed.
The so called AGM season generally takes place from March through to the end of July for companies with a December financial year-end. The date that a company holds its annual general meeting will depend on the company’s financial year end date, but typically within the next 6 months is a good guide. AGM season is typically a key factor for listed PLCs where delays in holding the AGM or declaring financial results can negatively impact share value.
Planning the AGM
The AGM cannot be held more than 15 months after the last one was held and the first AGM must be held within the first 18 months of incorporation. The members of the company must be given 21 days’ notice of the date, time, location and agenda of the AGM by hand or post. Notice can be given to members electronically i.e. via email once the constitution includes such a provision. The members of a limited company and a PLC are the owners but the owners of a CLG are not necessarily the members.
The minimum amount of members that must be present at the AGM is called the quorum. The quorum for limited companies is two members and the quorum for PLCs is three members. The quorum can be set at a higher figure in the constitution. If the quorum is not satisfied, the AGM must be stopped for a week. If the meeting is to be adjourned to another date, then the 21 days’ notice rule will apply again. Short notice for the AGM is possible if all voting members and auditors (if appointed) agree to it.
The AGM is conducted by the chairperson who does not have to be a director. A person (usually separate to the chairperson), nominated by the directors will take the minutes of the AGM. An Annual General Meeting can be held outside the State where there is unanimous agreement allowing this. Alternatively, there is a duty to make necessary arrangements to ensure that members can by technological means participate in such a meeting without leaving the State; such as holding the AGM by teleconference.
Members will vote on items on the agenda by way of a resolution. An ordinary resolution is the most common resolution used at an AGM and requires a simple majority of voting-shareholders, in order to be passed. A special resolution is used less frequently as its purpose is to decide on important things such as a change to the constitution or a winding up of the company. A special resolution requires 75% or three-quarters of the shareholders who hold voting shares.
If voting takes place by a show of hands, then generally one hand is equal to one vote. However, if voting is done by a poll, one share is equal to one vote. If a member cannot attend the AGM, they can send someone in their place, called a proxy. The proxy holds the same rights as the member they are representing.
Dispensing with the AGM
Single-member companies are not legally required to hold an AGM. If the sole-member wishes to dispense with the holding of the AGM, they must put this decision in writing and address it to the company. The directors are then obliged to send the accounts to the sole-member for review/approval.
If the company is a multi-member company, a unanimous written resolution can be passed in order to dispense with the AGM. The resolution must be signed and also expressly acknowledges the acceptance of the financial statements, prior to their filing with the CRO.
In the case of a multi-member company whereby the AGM has not been held, any member can ask the Office of the Director of Corporate Enforcement to call or order the calling of the AGM by filling out a complaint form found on the department’s official website.
For more information on your company’s secretarial requirements or how to prepare for AGM season, please do not hesitate to contact us on +353(0)1 646 1625 or email us at email@example.com.