What is an Annual General Meeting (AGM)?

An Annual General Meeting (AGM) serves as a crucial gathering, bringing together all members/shareholders and stakeholders of a company. Its primary purpose is to deliberate upon and approve various business matters essential for the company’s operation and governance.

When Should an Annual General Meeting Be Held?

As stipulated by Section 132 of the Companies Act 2017, every company, except single-member entities, is required to conduct an AGM annually. For newly incorporated companies, the inaugural AGM must be convened within sixteen (16) months from the incorporation date. However, companies can opt to hold their first AGM earlier to align with their financial year. Subsequent AGM’s are to be held within 120 days from the end of the financial year.

How to Organize an Annual General Meeting?

Given that an AGM involves all members/shareholders and stakeholders, meticulous notice must be extended to each of them. The company’s board of directors is responsible for fixing the AGM’s date and disseminating notices to all members/shareholders and stakeholders.

Notice of the Annual General Meeting

In compliance with the Companies Act 2017, companies are mandated to issue AGM notices at least twenty-one (21) days before the meeting date. Notices must be sent to all members and individuals entitled to receive them. For listed companies, a copy of the notice must be furnished to the SECP. Additionally, notices must be published in English and Urdu newspapers of nationwide circulation.

How to Serve Notice of the Annual General Meeting?

Notices should be served to members and stakeholders at their registered addresses in Pakistan. If no registered address exists, notices should be sent to the address provided to the company for this purpose. Various methods, including hand delivery, postal service, courier, or electronic means, can be employed for notice delivery.

Location of the Annual General Meeting

Private limited or unlisted public companies have the flexibility to conduct AGM’s at any chosen venue, akin to board meetings. However, listed companies must hold AGM’s in the city where the company’s registered office is situated or the nearest city.

Agenda at the Annual General Meeting

AGM’s typically address specific transactions mandated by law or company bylaws. Common agenda items include:

(a) Review of financial statements and reports of the board and auditors;

(b) Declaration of dividends;

(c) Election and appointment of directors to fill vacant positions;

(d) Appointment of auditors and determination of their remuneration.

Special Business at the Annual General Meeting

For any special business slated for discussion at an AGM, a statement elucidating all material facts pertaining to the business must be appended to the meeting notice. This statement should disclose the extent of directors’ interests in the business and specify where related documents can be inspected.

Quorum Requirement for the AGM

The quorum for AGM’s in private or unlisted public companies entails at least two members, representing Twenty-five percent of the total voting power. For listed companies, a minimum of ten members, personally or via video link, representing Twenty-five percent of voting power, constitutes a quorum. However, companies may stipulate higher quorum requirements in their articles.

Chairmanship of the Annual General Meeting

The chairman of the company’s board of directors, if available, presides over AGM’s. If the chairman is absent or unwilling to act as chairman, any director present may be elected as chairman. In the absence of directors, members present may elect a chairman from amongst themselves.

Adjournment of the Annual General Meeting

AGM’s can be adjourned under specific circumstances. If the quorum isn’t met within half an hour from the scheduled time, the meeting is adjourned to the same time and place the following week. If quorum remains unmet, the presence of at least two members via video link constitutes a quorum, subject to the company’s articles.

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