An Annual General Meeting (AGM) is a chance for the company’s management and shareholders to talk to each other. The Companies Act of 1994 says that every company must hold an annual general meeting to talk about things like the year’s results, who will be the auditor, and so on. For the AGM, a company should follow the steps in the Companies Act of 1994.
Companies Required to Hold an AGM
All companies except Proprietorship, should hold an AGM after the end of each financial year. A company must hold its AGM within a period of six months from the end of the financial year.
There are few procedures should be taken in terms of arranging an Annual General Meeting and they are given below,
- Registration of copies of special and extra ordinary resolution
However, in the case of a first annual general meeting, the company can hold the AGM in less than nine months from the end of the first financial year. In such cases where the first AGM is already held, there is no need to hold any AGM in the year of incorporation. Do note that the time gap between two annual general meetings should not exceed 15 months.
Procedure to Hold an AGM
With fourteen days’ written notice, an annual general meeting can be called. With twenty one days’ notice, a special resolution can be called. At least 21 days before the meeting, the Board of Directors must put together a report and send it to every member of the company.
If the report is sent after the time limit set by the law, it will be considered to have been sent properly, and shareholders won’t be able to say anything about it. On a valid shareholder’s meeting for a special resolution, the notice must have been given at least 21 days before the meeting.
- All members of the company including their legal representative of a deceased member and assignee of an insolvent member.
- The statutory auditor(s) of the company.
- All director(s) of the company.
You can send the notice in writing by speed mail, registered mail, or electronically. The notice should be sent to the member’s address, which is listed in the company’s records.
In the case of electronic communication, the notice should be sent to the member’s e-mail address listed in the company’s records. The notice can be written as text in an email or sent as an attachment. Notice of the AGM should be posted on the company’s website or any other website that the government may suggest.
If at least 95% of the members who are allowed to vote at the AGM agree, the meeting can be called with less than 21 days’ notice. The permission can be given either in writing or electronically.
What is the Agenda of an AGM?
The matters discussed or business transacted in an AGM consists of:
- Consideration and adoption of the audited financial statements.
- Consideration of the Director’s report and auditor’s report.
- Dividend declaration to shareholders.
- Appointment of directors to replace the retiring directors.
- Appointment of auditors and deciding the auditor’s remuneration.
- Apart from the above ordinary business, any other business may be conducted as a special business of the company.
The ordinary business of the company will be passed by an ordinary resolution where the votes cast in favour are more than the votes cast against the resolution.
However, in case of special business transactions, the resolution may be passed as an ordinary resolution or a special resolution, depending on the applicable legal provisions. A special resolution requires at least 75% votes in favour of the resolution.
An AGM should be conducted during the business hours between 9 a.m. and 6 p.m. only. The meeting can be conducted on any day, which is not a national holiday, including holidays declared by the Central Government. The meeting can be held at any place which is within the limits of the city or town or village in which the registered office is situated.
An unlisted company can hold an AGM at any place in Bangladesh after obtaining consent from its members in writing or in electronic mode. The Board decides the date, time and place of the AGM as per the directions given in a general meeting of the company.
Quorum for an AGM
In the case of a private company, two members present at the meeting shall be the quorum for the AGM. In the case of a public company, the quorum is:
- Five members present at the meeting if the number of members is within one thousand.
- Fifteen members present at the meeting if the number of members is more than one thousand but within five thousand.
- Thirty members present at the meeting if the number of members is more than five thousand.
Hence, A meeting must have a quorum of at least two people, which must be present at the AGM (proxies included). In public companies, there must be at least 5 people there. In case the quorum for the meeting is not present within half an hour from the scheduled time, the meeting will be adjourned to the same day in the following week for the same time and at the same place.
Members’ Rights in an AGM
The members (including shareholders) of the company are entitled to attend and vote at the AGM. Members can cast their votes by a physical ballot or postal ballot or through e-voting. Members can appoint proxies to attend an AGM and vote on their behalf. The proxy should be appointed in writing, and the proxy form should be signed by the member.
In case the proxy is appointed by a corporate shareholder, the proxy form should be signed and sealed by an authorised signatory of the corporate. The members can elect one among themselves as the chairman of the meeting. However, if the articles of association of the company provide for a chairman, such person shall chair the AGM of the company.
Minutes of an AGM
Every company has to prepare the minutes of the AGM compulsorily. The minutes of the AGM means the written record of the proceedings of the meeting. They state the events that took place and the resolutions passed in the AGM.
The Company Secretary will record the proceedings of the AGM. Where there is no Company Secretary, any other person duly authorised by the Board or by the Chairman will record the proceedings.
The minutes of the AGM should be signed and entered in the minute book within thirty days from the AGM. The Minutes book will be kept at the Registered Office of the company or at such other place approved by the Board. Any member/shareholder of the company, upon request to the company, can inspect the Minutes book of the AGM on paying the prescribed fee.
The company’s annual financial report is one of the things that must be shown at the Annual General Meeting.
- Report of the auditor
- Report of the director
At an AGM, the person in charge will give shareholders a chance to ask questions about the company’s management, the compensation report, and the auditors.
The shareholders can send the company auditor any questions they have about the business in writing at least five days before the AGM or at the meeting itself. They have to send their questions to the board of directors, and if the questions are about the company, the company will send them to the auditor. The company’s auditor can also go to the annual general meeting and answer all the questions.
Extension of Time for Holding an AGM
The Registrar of Companies can extend the time available to hold an AGM by three months. The company should apply for an extension through e form GNL-1 specifying the reasons for the extension and the period for which the company requires an extension. The RoC will record the reasons for giving the extension. However, no extension is available to hold the first annual general meeting.
Reasons for Seeking an Extension of AGM
- Mergers and acquisitions.
- Delay in finalising the financials.
- Delay in audit reports due to absence of auditors because of reasons such as death, resignation, incapacity to sign or other such valid reasons.
- Information loss in a computer due to virus or system-related issues.
- Non-readiness of the economic records due to natural calamity, loss of commercial data, and vacancy of directors.
- Change in a financial year.
- Non-availability of shareholders leads to the absence of a quorum.
- Non-availability of directors on valid grounds. For example, there is the sudden demise of a director due to which the limit of directors goes below the minimum requirement of directors.
- Confiscation of books of accounts by the IT department, Serious and Fraud Investigation Cell or other government officials.
Steps for Filing an Application Seeking Time Extension for Conducting AGM
- The director of the company will initiate a meeting of the board of directors concerning which notice has to be sent to all the directors 7 days before holding the board meeting.
- Hold a board meeting on the particular date mentioned in the notice.
- Pass a board resolution for time limit extension for holding the annual general meeting detailing the unsettled reason for an AGM
- The form will go through the office of the RJSC.
- The Registrar will verify the application on the precise grounds and may permit an extension when he/she thinks it’s valid to grant the same.
- Get the certificate of the extension privilege in the holding of AGM of the company from the Registrar.
Reporting of the AGM
After the conduct of AGM, every listed company has to file a report on the AGM within a period of 30 days from the conclusion of the AGM.
Registration of copies of special and extra ordinary resolution
Within fifteen days of the resolution being passed, a copy of it must be printed, signed by a person with the right to do so, and sent to the Registrar to be recorded. Every copy that was printed after the date of the resolution included a copy of the registered article.
If the article wasn’t registered, it could be sent to be printed for 50 taka or less, depending on what the company said. If a company makes a mistake, it will have to pay up to 50 taka for each copy. Section 88 says that anyone in the company who makes a mistake on purpose will be punished for that mistake.
Penalty for delaying to hold AGM
If default is made in terms of holding the annual general meeting in prescribed time in accordance sub-section (1) and (2) of section 81 of the Companies Act, 1994, the person or company responsible for the default will have to pay a fine that could go up to BDT 10,000. If the default continues, the fine will go up by 250 taka every day after the first day it happens.
Consequences and Penalty for Default in Holding an AGM
In case a company fails to hold an AGM within the stipulated time or extension obtained by it, the Tribunal may itself or on an application made by any director or member order an AGM to be conducted as per its directions.
If the company further defaults in holding a meeting in accordance with the directions of the Tribunal, the company and every officer of the company who commits the default shall be punishable with a fine of up to Rs 1 lakh. In case of continuing default, a fine of Rs 5,000 per day is levied for each day during which the default continues.
|Mode of issuing Notice||In the current circumstances, the notices can be sent via e-mails registered with the company or depository participants. Before sending out notices together with the financial statements, company must publish atleast once in a vernacular newspaper in the district in which the registered office of the company is situated and one english newspaper also preferably having electronic editions.|
|Access to Auditor’s Report||Due to the difficulty in sending out physical copy of the financial statements (including Board’s report, Auditor’s report, or other documents), these can be sent out via e-mail to the members, trustees and the persons entitled.|
|Dividend dispatch measures||The companies can make adequate arrangements to allow the mermbers to give their mandate for receiving dividends directly in their bank accounts through the ECS or any other means. For shareholders not have not shared bank accounts details may receive the dividend warrant/cheque by post.|
|Matters considered in the AGM||Only the items of special business, considered to be unavoidable by the Board, may be transacted, apart form ordinary business.|
|Mode of conducting a meeting||The meeting must be conducted through Video Conferencing or other audio-visual means (OAVM).|
|Place of conducting AGM||At any other place in the district where the registered office of the company is located taking cautionary steps as stipulated. It can also hold meeting virtually with some members physically present and providing the facility of VC or OAVM, for allowing other members of the company to participate in such meeting.|
|Quorum of the AGM||All the members physically present in the meeting and those attending the meeting through the.facility of VC or OAVM shall be taken together for arriving at the quorum under section 103 of the Act.|
Frequently Asked Questions
How many AGMs must be conducted in a year?
A company that is not a sole proprietorship must hold at least one Annual General Meeting (AGM) every year. If the company just got started, the first AGM should take place within nine months of the end of the first financial year. So, the company doesn’t have to have an AGM in the same year it was founded.
Do AGM rules apply to a General Meeting?
There are many different kinds of general meetings in a company. These include the annual general meeting, the extra ordinary general meeting, meetings of members, and meetings of creditors or debenture holders. All general meetings of a company must follow the rules about how to hold an AGM, the quorum, the rights of members, and the minutes of an AGM.
Can we hold an AGM on Sunday?
Yes. An AGM can happen on any day, even a Sunday, as long as it’s not a national holiday on Sunday. But the AGM should be held on a Sunday during business hours, from 9 a.m. to 5 p.m.
Can an AGM be held on a public holiday?
Yes, an annual general meeting can be held on a holiday. According to the Companies Act of 1994, an AGM cannot be held on a national holiday. But the Act says nothing about public holidays. So, a company can hold its annual meeting on a holiday.
If an adjourned AGM falls on a National holiday, can the AGM be held on that day?
Yes. An AGM cannot be held on National Holiday; however, no specific provision restricts an adjourned AGM to be held on a national holiday. Thus, an adjourned AGM can be held on a national holiday as the original scheduled date of the meeting was not on a national holiday.
What are the national holidays in Bangladesh in 2023?
Holidays and Observances in Bangladesh in 2023
|1 Jan||Sunday||New Years Day||Optional Holiday|
|10 Jan||Tuesday||Bangabandhu Homecoming Day||Observance|
|26 Jan||Thursday||Saraswati Puja||Optional Holiday|
|5 Feb||Sunday||Maghi Purnima||Optional Holiday|
|14 Feb||Tuesday||Valentine’s Day||Observance|
|18 Feb||Saturday||Maha Shivaratri||Optional Holiday|
|19 Feb||Sunday||Shab-e-Meraj||Optional Holiday|
|21 Feb||Tuesday||Language Martyrs’ Day||Government Holiday|
|2 Mar||Thursday||National Flag Day||Observance|
|7 Mar||Tuesday||Doljatra||Optional Holiday|
|8 Mar||Wednesday||Holi||Hindu Holiday|
|8 Mar||Wednesday||Shab e-Barat (Tentative Date)||Government Holiday|
|17 Mar||Friday||Sheikh Mujibur Rahman’s birthday||Government Holiday|
|19 Mar||Sunday||Arrival Day of Sri Sri Harichand Tagore||Optional Holiday|
|21 Mar||Tuesday||March Equinox||Season|
|26 Mar||Sunday||Independence Day||Government Holiday|
|6 Apr||Thursday||Maundy Thursday||Optional Holiday|
|10 Apr||Monday||Easter Monday||Optional Holiday|
|14 Apr||Friday||Bengali New Year||Government Holiday|
|19 Apr||Wednesday||Shab-e-qadr (Tentative Date)||Government Holiday|
|21 Apr||Friday||Jumatul Bidah (Tentative Date)||Government Holiday|
|22 Apr||Saturday||Eid ul-Fitr (Tentative Date)||Government Holiday|
|23 Apr||Sunday||Eid ul-Fitr Holiday (Tentative Date)||Government Holiday|
|24 Apr||Monday||Eid ul-Fitr Holiday (Tentative Date)||Government Holiday|
|25 Apr||Tuesday||Eid ul-Fitr Holiday (Tentative Date)||Optional Holiday|
|1 May||Monday||May Day||Government Holiday|
|4 May||Thursday||Buddha Purnima/Vesak||Government Holiday|
|14 May||Sunday||Mothers’ Day||Observance|
|18 Jun||Sunday||Fathers’ Day||Observance|
|29 Jun||Thursday||Eid al-Adha (Tentative Date)||Government Holiday|
|30 Jun||Friday||Eid al-Adha Holiday (Tentative Date)||Government Holiday|
|1 Jul||Saturday||Eid al-Adha Holiday (Tentative Date)||Government Holiday|
|2 Jul||Sunday||Eid al-Adha Holiday (Tentative Date)||Optional Holiday|
|29 Jul||Saturday||Ashura (Tentative Date)||Government Holiday|
|15 Aug||Tuesday||National Mourning Day||Government Holiday|
|6 Sep||Wednesday||Janmashtami||Government Holiday|
|11 Sep||Monday||Akhari Chahar Somba (Tentative Date)||Optional Holiday|
|27 Sep||Wednesday||Eid e-Milad-un Nabi (Tentative Date)||Government Holiday|
|24 Oct||Tuesday||Durga Puja||Government Holiday|
|16 Dec||Saturday||Victory Day||Government Holiday|
|25 Dec||Monday||Christmas Day||Government Holiday|
Legal Advice regarding Annual General Meeting by Tahmidur Rahman Remura:
Barristers, Advocates, and lawyers at Tahmidur Rahman Remura Wahid in Gulshan, Dhaka, Bangladesh, have a lot of experience helping clients through the whole process of legal provisions and consequences of Annual General Meeting of any Domestic and International Companies in Bangladesh. If you have any questions or need legal help, please send us an inquiry over email or phone.
Email at: [email protected]
Call us on: +8801847220062, +8801779127165
Address: House 410, Road 29, Mohakhali DOHS Phone: +8801779127165 or 01847220062