What Is An Annual General Meeting?
An annual general meeting (AGM) is a yearly formal gathering held by organisations with shareholders. These meetings provide a chance to the organisation’s leadership to communicate with the shareholders about the previous year’s performance, future plans, and to allow the members to vote on important issues.
Here’s a breakdown of the key aspects of an AGM:
- Who Attends?: Typically members or shareholders of the organisation.
- How Often: Not more than 15 months between two AGMs
- Purpose:
- For the company’s leadership to present information on the past year’s performance (financial and otherwise) and future plans
- For members/shareholders to vote on important issues such as electing board members, approving financial statements, and proposals for future actions
- For members/shareholders to ask questions and raise concerns
What Is A Startup Shareholder Meeting?
A startup shareholder meeting is similar to an AGM but with some key differences to consider due to the specific nature of startups. Here’s a breakdown:
Similarities To AGM:
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- Participants: Shareholders of the startup company.
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Purpose:
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- Communication: Company leadership presents information on the startup’s progress, financials, and future plans
- Voting: Shareholders can vote on important decisions that affect the startup’s direction, such as electing board members or approving major actions
- Q&A: Shareholders have the opportunity to ask questions and raise concerns with leadership
Differences From AGM:
- Frequency: Startup shareholder meetings may not be held annually but rather when there are significant issues requiring shareholders’ inputs
- Formality: Startup meetings can be less formal than AGMs, especially in the very early stages
- Focus: Due to the nature of startups, discussions may centre around fundraising, product development milestones, and securing partnerships, rather than past performance.
What Are The Objectives Of An AGM?
Shareholders’ meetings, whether annual general meetings (AGMs) or special meetings, serve several key objectives:
- Communication: Leadership presents information on the company’s performance (financial and otherwise) and future plans. This can include financial statements, strategic goals, and upcoming challenges
- Voting On Important Issues: Shareholders get to exercise their ownership rights by voting on matters that significantly impact the company’s direction. This can include:
- Electing members of the board of directors
- Approving financial statements
- Voting on proposals from management, such as stock issuance, mergers and acquisitions, or executive compensation packages
- Shareholder Participation: Meetings provide a platform for shareholders to ask questions, voice concerns, and seek clarification on company matters. This allows for a more open and transparent exchange of information
Who Are The Attendees?
The quorum for these meetings includes five members present for a public company and two members present for a private company. The proxies (an agent legally authorised to act on behalf of a member) do not constitute the quorum.
If the quorum is unmet within half an hour from the time appointed for the meeting, the meeting will be adjourned to the same day in the next week at the same time and place or on a day, time and place decided by the board of directors. If the quorum is absent within half an hour of the appointed time in the adjourned meeting, the members present shall be the quorum.
What Happens During An Annual General Meeting?
Annual general meetings (AGMs) follow a general structure to achieve their objectives. The following is a breakdown of what typically happens during a shareholders’ meeting:
Before The Meeting:
- Notice & Agenda: Shareholders receive a formal notification (notice) about the meeting date, time, location, and a copy of the agenda outlining the topics to be discussed and voted on
- Proxy Voting: Shareholders who cannot attend the meeting in person can appoint another shareholder (proxy) to vote on their behalf
During The Meeting:
- Opening Remarks: A company official, often the chairperson of the board, welcomes attendees and opens the meeting with a brief overview of the agenda
- Management Presentations: Company leadership, such as the CEO and CFO, present information on the company’s performance, financial statements, future plans, and strategic goals. This might include presentations, reports, or videos
- Q&A Session: Shareholders have the opportunity to ask questions and raise concerns about the company’s performance, plans, or any other agenda items
- Voting: The voting process may involve a physical show of hands, electronic voting systems, or proxy votes already submitted. Shareholders vote on proposals put forward by management or by other shareholders. These proposals can include:
- Electing board members
- Approving financial statements
- Mergers and acquisitions
- Stock issuance or other major changes
- Other Business: Any other items listed on the agenda are addressed, such as announcements or reports from committees
After the Meeting:
- Minutes: An official record of the meeting, including discussions and voting results, is documented and distributed to shareholders (minutes)
- Action Items: Management follows through on any action items identified during the meeting, such as implementing proposals approved by the shareholders
