In light of the COVID-19 outbreak in Singapore, some companies in the country might encounter difficulties to hold their Annual General Meeting and file their Annual Returns. Therefore, ACRA has granted deadline extension for these statutory requirements.
This article offers some essential information about the Annual General Meeting, Annual Returns, and ACRA’s support measure for them.
What is an Annual General Meeting?
The Annual General Meeting (AGM) is a mandatory meeting conducted by shareholders of a Singapore company each calendar year at particular intervals. This meeting entitles the company’s shareholders the right to join in some company decisions that need their approval.
One of the main purposes for conducting AGM is for a company to present its financial accounts to the shareholders for approval. The financial statement should reflect the entity’s financial performance over the year. The approval of financial accounts is based on a simple majority.
While it is mandatory for public companies to conduct AGM, the meeting is not a legal requirement for private companies. However, they have the option to hold an AGM. Under Singapore law, private companies are offered with a choice to dispense with the holding of the meeting.
The following are the required process for a private company to dispense the meeting:
- The private companies’ members agree to the meeting dispensation with a resolution.
- After the members’ agreement, any issue which requires approval at the meeting will be done through passing the resolution in writings.
When Should a Company Hold an AGM
A company mandated to hold an AGM has the following timelines:
- For public-listed entities, the AGM should be held within four months following their financial year-end
- For non-listed entities, the AGM should be conducted within six months following their financial year-end
What Should Be Presented During An AGM
Companies typically opt to engage for the services of a company secretary firm to help them prepare the required paperwork for holding an AGM. Company constitution is one of the necessary documents.
Companies will furnish their revenue and loss account for the fiscal year during the meeting. During the meeting, matters presented, among others, include the following:
- The accounts adoption
- Declaration of dividend
- Directors’ fees’ approval
- Directors reelection
- Auditors reappointment
How to File an AGM
A written notice about the AGM should be circulated at a minimum of fourteen days prior to the meeting so that all members can set aside some of their time for the meeting. Details that should be included in the notice are time, date and venue of the meeting, information regarding the to-be-passed resolution, and a notice of the members’ right for proxy appointment. Within the period, shareholders should receive copies of the documentation, including the balance sheet, financial account, and report of directors and auditors.
What is an Annual Return?
An annual return is an electronic form filed with ACRA and carries essential particulars of a company, including the names of its directors, secretaries and members, as well as the financial statements’ date. It offers crucial details that help the stakeholders of the company to make an informed judgment.
The company’s appointed officials, such as a company secretary or director, can file for the annual return via BizFile+, which is ACRA’s online filing portal. Alternatively, they can hire registered filing agent services to do the job.
Details Required when Filing for an Annual Return.
When filing for the annual returns, the company needs to ensure that its details on business structure, office address, registered charges, and officers’ particulars are up-to-date. Business owners also need to verify if there are any changes to the primary and secondary business operations of the company.
Deadlines Extension for AGMs and ARs During COVID-19
For listed and non-listed entities whose AGMs are due during the period of 16th April 2020, to 31st July 2020, ACRA shall grant a sixty days deadline extension. Companies with a previously given deadline extension within this period can get another sixty days of extension from the last extension date.
Every listed and non-listed company with ARs filing deadlines for the period of 1st May 2020 to 31st August 2020 shall have the due date extended to sixty days. Fortunately, these companies do not have to apply for the extension of time.
On the other hand, listed and non-listed entities whose AGMs are due during the period of 1st to 15th April 2020, will not receive any fines. Their AR filing deadline will also be extended to sixty days. Likewise, these companies do not need to apply for the time extension.
What Happens if a Company Fails to Meet the Deadline to Hold AGM
Failure to comply with the AGM requirements will put the company or directors at risk of prosecution in court. Eventual repercussion may include debarment or disqualification from being a director. Moreover, companies may face penalties from ACRA. Late lodgement charges may also be imposed for every late lodgement of annual return.
Seeking Expert Help from The Corporate Secretary Services Provider
Professional corporate secretary services firm help the company arrange an AGM that is in compliance with the Singapore’s Companies Act and company constitution. They can also help file the annual return.