Annual General Meeting (AGM) – Definition & Detailed Explanation – Meeting Types Glossary

I. What is an Annual General Meeting (AGM)?

An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s shareholders, directors, and other stakeholders. It is a formal event where important decisions are made, financial reports are presented, and key issues are discussed. The AGM provides an opportunity for shareholders to voice their opinions, ask questions, and vote on important matters related to the company’s operations.

II. Why are AGMs important?

AGMs are crucial for maintaining transparency and accountability within a company. They provide shareholders with a platform to hold the board of directors accountable for their decisions and actions. AGMs also serve as a forum for discussing the company’s performance, strategy, and future plans. Additionally, AGMs are essential for ensuring compliance with legal requirements and regulations governing corporate governance.

III. Who attends an AGM?

The attendees of an AGM typically include shareholders, board members, senior executives, auditors, and legal advisors. Shareholders are the primary participants in an AGM as they have the right to vote on important matters such as the election of directors, approval of financial statements, and appointment of auditors. Board members and senior executives are also present to provide updates on the company’s performance and answer questions from shareholders.

IV. What typically happens during an AGM?

During an AGM, the company’s financial statements are presented to shareholders for approval. The board of directors provides an overview of the company’s performance, strategy, and future plans. Shareholders have the opportunity to ask questions, raise concerns, and discuss key issues affecting the company. Important decisions, such as the election of directors and approval of dividends, are also made during an AGM.

V. How are decisions made during an AGM?

Decisions at an AGM are typically made through voting. Shareholders are given the opportunity to vote on various resolutions put forward by the board of directors. Each shareholder is entitled to one vote per share held, and decisions are usually made by a simple majority. Proxy voting is also allowed, where shareholders can appoint someone else to vote on their behalf if they are unable to attend the meeting.

VI. What are the legal requirements for holding an AGM?

The legal requirements for holding an AGM vary depending on the jurisdiction and the type of company. In most countries, companies are required to hold an AGM within a certain timeframe after the end of the financial year. The meeting must be properly convened, with adequate notice given to shareholders. Companies are also required to prepare and distribute financial statements, appoint auditors, and file annual returns with the relevant regulatory authorities. Failure to comply with these legal requirements can result in penalties and sanctions.