A Guide to AGMs

Annual General Meetings (AGMs) are held every calendar year, as the name suggests.

The primary purpose of an AGM is to allow the company’s members to meet the directors, ask questions and receive information about the company.

We have produced this quick guide to explain why most companies are required to hold an Annual General Meeting (AGM) and to provide a summary of the rules for AGMs.

What is an AGM?

An AGM is a meeting of members of a company at which the members can ask questions and get information about the company.

Some companies are required to hold an AGM every calendar year.

The length of time between one AGM and the next cannot be more than 15 months.

A company must hold its first AGM within 18 months of incorporation.

Can some companies choose not to hold an AGM?

Yes.

Private limited companies (LTDs) and some single member companies can decide not to hold an AGM.

Special rules apply in these cases.

LTDs

An LTD company may dispense with holding the AGM where all the members entitled to attend and vote sign a written resolution dispensing with the AGM and

• Acknowledging receipt of the financial statements that would have been laid before the AGM
• Resolving all such matters as would have been resolved at the AGM
• Confirming there is no change in the person (if any) appointed as statutory auditor of the company

This resolution must be passed in each calendar year.

This resolution is as valid as if it had been passed at a general meeting.

Single member companies

The sole member must write to the company and say they have decided not to hold an AGM.

The company must send the financial statements and other documents to the member.

The documents are those that would normally be sent to the member before the AGM.

Members

A member is one of the company’s owners whose name appears on the register of members.

Every company must keep a register of its members.

This document lists the name and address of each member and the date they became a member.

Any member may inspect the register free of charge.

How does someone become a member?

There are two ways:

1. When a company is first set up, the people who set it up automatically become members of the company, even if their names are not entered in the register of members.
2. Other people can choose to become members.

The company’s rules set out who can become a member and how to become a member.

When someone agrees to become a member, their name is entered in the register of members.

How many members can companies have?

By law, all companies must have at least one member.

For most companies, there is no maximum number of members.

However, there are two exceptions:

• a private company limited by shares (LTD), and
• a designated activity company (DAC) such as a charity, trade association or sport club.

By law, these two types of companies may have no more than 149 members.

What is the purpose of an AGM?

An AGM gives members an opportunity each year to meet the directors, ask questions and get information about the company.

The Companies Act set out an exhaustive list of what the business of an AGM must include, namely:

• review of the company’s financial statements, directors’ report and, if applicable, the auditors’ report;
• fill vacancies on the board of directors;
• appoint or re-appoint auditors (if required);
• unless the constitution provides otherwise, the declaration of a dividend (if any) of an amount not exceeding the directors’ recommendation and the authorisation of the directors to approve the auditors’ remuneration (if any);
• where the company’s constitution provides, the election and re-election of directors;
• where the constitution provides, the remuneration of the directors

The AGM may also discuss and vote on other matters.

Who can call an AGM?

The board of directors will normally call an AGM and ask the company secretary to write and let the members know.

The notice must follow the rules laid down in company law.

Where are AGMs held?

AGMs of companies are normally held in the State, unless:

• all the members entitled to attend and vote agree in writing to hold the AGM elsewhere; or
• the members voted at the previous AGM to hold the next meeting outside the State; or
• the company has changed its internal rules to allow the AGM to be held outside the State.

The law does not say that the AGM must be held in any particular place in the State.

The directors can decide where to hold the AGM or the company’s rules may say where the AGM shall be held.

Notice of an AGM

Notice of general meetings shall be given to:

• every member;
• the personal representative of a deceased member
• the assignee in bankruptcy of a bankrupt member of the company
• the directors and secretary of the company.

The auditor is also entitled to receive notice of general meetings.

Notice periods

The notice should be sent at least 21 days before the AGM is held (not including the day the notice is sent or the day of the meeting).

This period is called the ‘notice period’.

The constitution can provide for a longer notice period but not a shorter period.

A company is only allowed to give shorter notice if the company auditors and all the members entitled to attend and vote at the meeting agree.

How do members receive notice?

The company may:

• hand the written notice to a member in person;
• send the notice by post;
• or send the notice electronically, if the company’s rules allow.

If the company’s rules do not allow the company to send notice electronically of an AGM, the members may change the rules.

To do so, the company must put a proposal to members to vote on at an AGM or Extraordinary General Meeting (EGM).

At least 75% of those voting at the AGM must approve the change.

What must the notice include?

The notice will normally include:

• the date, time and place of the meeting;
• the agenda (this is a list of all of the matters to be discussed and voted on at the AGM);
• the financial statements for the year, including the directors’ and auditors’ reports (if any); and a note telling members of their right to appoint a proxy and a proxy form.

You can use our Notice of AGM template to do this.

What is a proxy?

Any member of a company entitled to attend and vote at a meeting of the company who cannot attend a meeting can appoint someone (called a ‘proxy’) to attend the meeting on their behalf.

The proxy should be in writing, signed by the person appointed and deposited at the company’s registered office 48 hours before the holding of the meeting.

A proxy has the same rights as the member to vote and speak at the meeting.

Check out our proxy form

What is a quorum?

A quorum is the minimum number of members who must attend (in person or by proxy) an AGM for it to be a valid meeting.

The quorum for:

• single member companies is one member;
• and all other company types is two members.

However, the company rules can set a higher quorum.

What happens if a quorum is not present?

If a quorum is not present within 15 minutes of the scheduled start time of an AGM, the chairperson must postpone (adjourn) the meeting for a week or for another date that the directors choose.

If a quorum is not present at the reconvened meeting within half an hour of the scheduled start time, the members present will be the quorum and the meeting can go ahead.

Only the business left unfinished at the AGM, which was postponed, can be dealt with at the reconvened meeting.

When a meeting is adjourned for 30 days or more, notice of the reconvened meeting must be given to members.

Who runs the AGM?

The chairperson makes sure the meeting runs smoothly.

Usually, the chairperson is one of the directors.

However, if no director is present or willing to chair the meeting, the members who are present can appoint a member to act as chairperson.

Some company constitutions may have other rules for appointing a chairperson.

Where there is an equality of votes, whether on a show of hands or on a poll, the chairperson shall be entitled to a second or casting vote.

How are decisions taken at an AGM?

The members vote and decide on the items listed on the agenda.

The decisions taken are called resolutions.

There are two types:

• ordinary resolutions are used to decide most company business. They need a simple majority (50% plus one) of the votes cast at the meeting;
• special resolutions deal with certain important decisions. They need a 75% majority of the votes cast.

Check out our guide on ordinary and special resolutions

How is voting carried out?

Voting at an AGM is either by:

• a show of hands – where every member present (or by proxy) has one vote, and they raise their hand to vote; or
• a poll – this is a count of votes where every member present (or by proxy) has one vote for each share they hold.

Voting at an AGM is normally by a show of hands unless a member demands a vote by poll.

Some companies may have rules on voting, such as that no member may vote at an AGM if they owe fees or money to the company.

A poll may be demanded in relation to a matter (whether before or on the declaration of the result of the show of hands in relation to it).

A demand for such a poll may be made by—

• the chairperson of the meeting;
• at least 3 members present in person or by proxy;
• any member or members present in person or by proxy and representing not less than 10 per cent of the total voting rights of all the members of the company concerned having the right to vote at the meeting

Minutes

Records of company meetings are called Minutes.

Every company is required to keep minutes and to retain a minute book to record what happens at its general meetings.

The company decides who will keep the minutes.

Members have the right to inspect and get copies of the minutes of general meetings and resolutions.

The official minutes of a meeting are those approved either by the chairperson or by the members at the beginning of the next AGM.

There can be only one set of official minutes, which are a formal record of decisions taken at the AGM.

Check out our Minutes template

Registration of Resolutions

Copies of certain resolutions (being all special and certain ordinary resolutions) must be filed with the registrar of companies (CRO) within 15 days after they are passed.

Check out our letter to CRO

What if the directors do not call an AGM?

If the board of directors does not call an AGM, any member of the company may ask the Corporate Enforcement Authority (CEA) to call or order the calling of an AGM.

To do this, the member must fill out a formal complaint form and send it to CEA.

For more insights, you might find our AGM checklist useful.