Holding Annual General Meetings: A Mandatory Compliance – ACRA
An Introduction to AGM by ACRA
Every Singapore based company is required to hold an Annual General Meeting (AGM). It is a meeting wherein your company is required to present the annual financial statements to its members or shareholders. During the meeting, the shareholders can raise relevant questions concerned with the financial health of the company.
In retrospect, an AGM is an essential meeting wherein all business-related concerns are addressed by the company. The primary purpose of holding this meeting is full-disclosure of finances to the investors and shareholders. But, is it mandatory? And what happens if you don’t hold an AGM?
Let’s find out!
Timeline for Holding AGMs
● Every listed company in Singapore must hold an AGM within four months after the company’s financial year-end.
● However, if the company is not listed, the directors of the company are required to hold an AGM within six months after the company’s financial year-end.
● For newly incorporated companies, the AGM must be held within 18 months from the date of incorporation.
Some of the private companies are exempt from holding the AGM if they meet the below-mentioned criteria under section 175A:-
● All members have approved a resolution to waive the holding of AGMs;
● If the financial statements are shared with all the members within five months after the financial year-end; or
● If the company is a private or dormant (non-operating) that is exempt from filing financial statements.
What Happens if Your Company Doesn’t Hold an AGM?
Directors who fail to comply with this filing requirement from ACRA can be prosecuted in court. Further, the directors may even be disqualified or barred from holding a position in the company. And not just
that, but ACRA can also levy a hefty fine on the company. What’s more, is that ACRA may even impose a late lodgement fee for each annual return that is submitted late. The company may have to seek the approval of the Registrar if an extension to hold AGM is required, but under any and all circumstances, it must be held.
If in any case or situation, a company dispenses the holding of AGM, qualifies for an exemption, or a member requests for an AGM to be held after the company has filed the annual return, that company must lodge a “Notification of AGM” online through the Bizfile+ along with the date of member’s request and the future date on which it is to be held.
Pass the ACRA Filing Requirements with Flying Colours
ACRA has stringent filing requirements that must be complied with by every Singapore-based company. Failure to comply with these annual filing requirements can lead to serious legal consequences.
To know more about such compliances and for a more in-depth insight into ACRA filing requirements, please follow the DataTracks blog or speak to an expert @+65 315-836-54.