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What Is an Annual General Meeting and Does My Company Need To Hold One?

What Is an Annual General Meeting and Does My Company Need To Hold One?

In the United Kingdom, thousands of companies and other bodies are mandated to hold an Annual General Meeting (AGM) that can be attended by their members. If an AGM is not held, there could be potential legal consequences.

Read on to find out more about the AGM and whether your UK-registered company has to hold one.

What is an AGM?

An Annual General Meeting (AGM) is a mandatory annual meeting of the company’s shareholders to pass decisions that require shareholder approval by law, or a shareholders' meeting that is desired by the shareholders, the company or its board.

What is the Purpose of an AGM?

The AGM is a platform for your company to present your financial statements (accounts) to your shareholders (members). Shareholders can then raise questions about your company’s health, and make use of the opportunity to address their concerns.

Do I Need to Hold an AGM for My Company?

Depending on the type of company you own, you may or may not be required to hold an AGM. Under the Companies Act 2006, here are the requirements:

Type of company Requirement to hold an AGM
Public Required
Private, non-traded Not required by the Companies Act 2006, but its own articles of associate may require one
Single member No. A single member's decision has the same effect as the company's agreement in a general meeting, which can be done by a recorded resolution and passed in writing
Listed (a company that is included and on a given stock exchange so that its stock can be traded) Yes
Traded (a company whose shares carry rights to vote at general meetings and are admitted to trading on a regulated market in an EEA state by or with the consent of the company) Yes
Quoted (a company with shares in the Official List or officially listed in an EEA state, or is admitted to dealing on either the Nasdaq or New York Stock Exchange) Yes

When Should I hold the AGM?

For public companies, an annual general meeting must be held within 6 months from the day following its accounting reference date.

For private companies which are traded companies, an annual general meeting must be held within 9 months from the day following its accounting reference date.

For private companies which are not traded companies, they are not required to hold an annual general meeting unless required by its articles of association. Nonetheless, meetings should still be held to review matters to be dealt with every financial year, and ensure legal compliance.

When Do I Have to Call for the AGM?

Under various circumstances, you or your stakeholders will have to call for an AGM where consultation or the company's members' approval is required. An annual general meeting can be convened by:

  • your company's directors after an AGM request by the company's auditors to discuss the state of affairs following those auditors' resignation
  • your company's directors after the board has passed a resolution to call for an AGM
  • your company's directors after a request to convene an AGM by at least 5% of your company’s shareholders with fully paid up voting shares. These shareholders also have the right to request for a specific resolution to be considered at a general meeting or annual general meeting
  • the court, in limited circumstances in the event that an eligible shareholder applies to the court

Inform Relevant Parties of the AGM with Notice of Meeting

Your company's directors are responsible for informing shareholders, directors and auditors with a notice of meeting that they are eligible to attend and vote at. Unless your company's articles of association are in need of more time to put a notice in place for the AGM, the required notice period under the Companies Act 2006 is as of the following:

  • Private companies: at least 14 clear days*
  • Public companies which are traded companies: at least 21 clear days. In the event the company has owns a premium listing of equity shares on the London Stock Exchange, at least 20 working days
  • Public companies which are non-traded companies: at least 21 clear days
  • AGMs requested by company's members: within 21 days from request date and should be convened no later than 28 days from issuance of meeting notice

How to Hold an AGM during COVID-19 Pandemic

These are difficult times, and the government has implemented some measures to navigate the pandemic.

For a temporary period, companies and other bodies will be allowed to cease in-person meetings between shareholders and members. Instead, you can hold your AGM in a flexible manner with the help of technology, and host your meetings virtually.

For a temporary period, companies and other bodies will be allowed to cease in-person meetings between shareholders and members. Instead, you can hold your AGM in a flexible manner with the help of technology, and host your meetings virtually.

If your company’s AGM deadline is before the end of July, you can put off the meeting to a later date as long as it is before the end of September and/or you can organise a meeting with a limited number of members communicating between different locations.

However, quorum requirements must be fulfilled and your company directors should consult the company’s articles of association to make sure that electronic AGMs are permitted.

Penalties for Not Holding AGM

Failure to hold an AGM has serious potential legal consequences, making your company and its officers liable to a category three offence. If found guilty, your director may face a Class A fine (up to GBP 4,314) and/or a maximum term of 6 months of imprisonment.

Stay Compliant and Relieve yourself of the Paperwork

Staying compliant is important, but it’s not always easy to stay on top of things with so much going on. Fret not and leave the pesky paperwork to us.

Work with a dedicated and experienced accountant in the UK who will get to know your business. We are in charge of the filing deadlines, finding reliefs for your company, and arranging the documents perfectly. Got any questions?

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