The main purpose of an Annual General Meeting (AGM) is to allow the members of the company to meet the directors, ask questions and receive information about the company.
Discussions at an AGM include:
- The performance of the company
- The future of the company
- What dividends, if any, should be given to members
- A review of the financial statements of the company
- The appointment of the auditors for the company
- Vacancies on the board of Directors
According to the Companies Act 2014 and as the name suggests, AGM’s are held once every calendar year. Every company is required to hold an AGM within 18 months of incorporation and every year thereafter. No more than 15 months should pass between AGMs. The company’s financial statements for the year must be given to members and discussed during the AGM.
In this Director’s guide to AGM’s, we’ll answer the most commonly asked questions about AGM’s in Ireland and give you tips on how to run a successful AGM.
Do you need to have an AGM?
Yes - it's mandatory for companies to hold an AGM unless a written resolution is passed to dispense with this requirement.
Here's how to dispense of the requirement for holding an AGM:
Written resolution
All members need to approve and sign a written resolution wherein they agree to dispense the requirement to hold an AGM.
Ensure unanimous agreement
Even if one Director disagrees with not holding the AGM, the AGM must go ahead.
Shareholders need to be informed
The written resolution should be passed to all the shareholders for approval before the scheduled date to hold an AGM.
Financial statements
The resolution should also acknowledge the acceptance of the company’s financial statements, information regarding dividends, and remuneration of the Directors by the shareholders of the company.
What about single-member companies?
Single-member companies (i.e. one shareholder and one Director) can decide not to have an AGM. This decision should be put in writing and sent to the company. The Director of the company still needs to send the written resolution and the financial statements to the sole member of the company for review.
Who schedules the AGM?
The Director or Board of Directors calls for an AGM and sends notice of the AGM to all shareholders of the company.
According to the Companies Act, 2014 it is a legal requirement that all shareholders of a company receive the notice 21 days prior to an upcoming AGM regarding the date, time, location, and agenda. This notice can be delivered by hand or via post.
This notice can be sent to all the shareholders via email provided this provision is mentioned in the company’s constitution.
An AGM may also be called at a short notice if all shareholders agree to it. Just be sure to inform all the shareholders of their right to appoint a proxy.
What is a proxy?
A shareholder can give someone else permission to attend the AGM on their behalf. This person is known as a proxy and they have the same rights as other members to speak and vote at the AGM.
If a shareholder would like to appoint a proxy, it must be included in the AGM notice and should include contingency provisions in case the proxy cannot attend.
If you have questions about holding an AGM, talk to our Client Services Team about receiving advice from one of our certified Company Secretaries. We are always happy to assist.
Where do you hold an AGM?
Annual General Meetings for Irish companies should be held in Ireland. However, if all the shareholders agree to hold the AGM outside of Ireland, you can organise it to be held in a different country.
In this technological age, you can also arrange for shareholders and Directors to participate in the AGM via digital means without having to leave their home state. Please note that this needs to be stated in the company constitution.
Who runs the AGM?
The AGM is run by a chairperson who may or may not be a Director of the company. The chairperson can only be a non-director if none of the directors are present or willing to act as chairperson. In this case, a shareholder or other member of the company can fill the role.
There are no set rules around how a chairperson should be chosen, according to Irish company law. However, a company can choose to set out rules for selecting a set chairperson in their constitution.
If a company has a set chairperson, they will act as chairperson for all meetings, including the AGM. Otherwise, a new chairperson can be elected for each AGM- it should be reflected in the minutes that this person is acting as the chairperson for the meeting in question only.
Similarly, if the elected chairperson is not present within 15 minutes of the start time of the AGM, the other directors can choose a new chairperson.
Quorum
There should also be a quorum present at every AGM. This is the minimum number of people that must attend for a meeting to be valid. A quorum can consist of 2 people unless your company constitution states otherwise or your company is a single member/shareholder company.
Making decisions at an AGM
The decisions at an AGM are made by special and ordinary resolutions.
Shareholders will vote on the topics raised and the result will determine the type of resolution produced.
- An ordinary resolution is passed by a simple majority (50% plus one).
- A special resolution is used less frequently and it requires 75% of the votes.
The voting can be carried out by the show of hands where one hand equals one vote. You may also vote by a poll, where one share equals one vote.
If you choose to hold company meetings virtually or semi-virtually, you should make sure all members are aware of how voting works.
Minutes of meetings
The record of what was discussed at an Annual General Meeting is called “the minutes of the meeting”. Directors should appoint a person to take down the minutes of the meeting.
The minutes are maintained in a minute book which is usually kept with the company’s corporate documents.
Members of the company have the right to look at the minutes of the meeting and request a copy for their records.
There is no set timeframe for sending out minutes for review by members but it is good practice to send the first draft for review one week after the meeting. The minutes are then approved and signed at the next AGM.
If the minutes contain resolutions, or instructions to prepare a resolution, the relevant documents are prepared by the Company Secretary and should be signed by either 2 directors or 1 director and the Company Secretary as soon as possible.
If you wish to outsource minute recording to a company, such as Accountant Online, we can give you a draft of a minute book and you can fill it in accordingly. The official minutes are usually approved by the chairperson or by the members before the next AGM is held.
Talk to our Client Services Team if you’d like to know about our services- we’re always happy to advise you on the best services to meet your company’s needs.
What happens when an AGM is not held?
If the Directors fail to call for an AGM or send any written resolution to the members for approval to dispense the requirement to hold an AGM, then any member of a company may ask the Office of the Director of Corporate Enforcement (ODCE) to call for the meeting or order the calling of an AGM.
A member has to fill out a formal complaint form and send it to ODCE if they wish to take this route.
Tips to make sure an AGM is successful
- Familiarise yourself with the Companies Act 2014 or consult a professional Company Secretary. There may be specific requirements for an AGM in your industry.
- Since your financial statements are presented at your AGM you can start planning your AGM around the same time your accountant looks for your books and records.
- Make sure the AGM date is reasonable. There is no point in scheduling an AGM when you know members are likely not to be available. Have consideration for other schedules and accessibility.
- Accessibility and technology are important if considering to hold an AGM outside the state. It’s not advised to hold an AGM with poor WiFi quality if you expect members to call in via their computer.
- If can’t attend an AGM and you need to appoint a proxy, make sure it’s someone you trust to make decisions. This is because they will still get a vote during any decision making.
- Try to stick to the items on the agenda. If you work closely with the shareholders (or even not closely), you can get carried away with topics that are not on the agenda. Address them quickly but thoroughly to make sure nothing is missed off the agenda.
- Outsource the task to a professional. Your Company Secretary should offer a service to help you with your AGM. They can help you draft the AGM minutes.
Need help from a specialist?
Do you need help with your Annual General Meeting? Our Company Secretarial Maintenance service looks after all your compliance requirements so you don’t have to stress about company law. We know running your own business can be difficult – talk to an accountant, or let us help you with that.
By outsourcing your Company Secretary, you can focus on the parts of the business that need you the most. Our Company Secretarial Maintenance service offer 300 minutes of expert, professional and friendly Company Secretary support. Our dedicated Company Team guarantees that you have a team who you can contact when you need advice or guidance on company law.
Get in touch with our Client Services Team today to discuss how our Company Secretarial service can help you on your road to success.
Rachel is a certified company secretary from The Law Society College Dublin and currently leads the Company Secretarial Team at Accountant Online. Areas of expertise include Company Formation in Ireland and the UK, Company Secretarial procedures and regulations, and the Companies Act 2014 relating to small business and company directors.
