Whenever it is impossible for the company to allow a major issue to go unmentioned until the next AGM to be held, the Articles of Association of the company provide an avenue for holding general meetings other that AGMs for the discussion of special business matters. Such meetings are known as extraordinary general meetings.
An extraordinary general meeting (EGM) is a meeting held among the official body of the members of an organisation, shareholders of a company, or employees. A company secretary may assist in the administrative procedures of arranging and hosting the EGMs.
An extraordinary general meeting of the company takes place at irregular times whenever the board considers such a measure to be suitable.
Procedure Of Hosting an Extraordinary General Meeting in Singapore
The rules for conducting an EGM and the options involved in altering a resolution at an EGM as well as taking votes from proxies will vary depending on the type of organisation. An EGM is called to handle matters having to do with the administration of a company’s affairs and requires the consent of the members involved.
An EGM is called to deal with any of the following:
Step 1: Agree on agenda of meeting
Before the EGM takes place, the board of the organisation will have agreed on more than one resolution that will be put to consideration before approval at the EGM.
Extraordinary general meetings can take place on any day, including public holidays, or at any time. EGM are called either by the board of directors, members, or even the court on rare occasions.
Step 2: Sending notice to all stakeholders
The wording of the decision is sent to the shareholders and members with a note about its importance.
In a private company in Singapore, the minimum notice period for EGMs related to all resolution is 14 days. The same is true of public companies and EGMs related to ordinary resolution; however, EGMs in public companies which are related to special resolutions have a minimum notice period of 21 days.
The reason for this is that the board is known to have a better knowledge about the situation, and the resolution is in effect for the ideal solution although it might not be the interests of shareholders and members.
Step 3: Conducting the EGM
Usually, during an EGM, the chairperson of the EGM reads out the resolution and recommends the resolution to those who are present in the meeting approval.
Step 4: Concluding the EGM
The chairperson also takes questions about the decision, supervises the vote from those present, and declares the result of the vote.
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Step 5: After the EGM
Typically, the outcome of a voting session during an Extraordinary General Meeting (EGM) is disclosed at the conclusion of the meeting. As a result, the passing or rejection of resolutions is generally known by the end of the EGM.
However, in certain cases, additional steps need to be taken following an EGM to formalize the approved resolution(s).
For instance, if a company undergoes voluntary winding up through the passage of a special resolution at an EGM, it is necessary to lodge a copy of the special resolution with the Accounting and Corporate Regulatory Authority (ACRA) within 7 days.
Additionally, within 10 days, a notice of the same resolution must be published in at least one newspaper in Singapore. Only after completing these steps can the directors appoint a liquidator to initiate the voluntary winding up process.
When Can You Host An EGM in Singapore?
In many cases, the only times that the executives and the shareholders can meet is during the company’s AGM, which usually takes place once a year, at a fixed date and time. The first AGM of a company must be convened within 18 months of its incorporation, and subsequent ones are to be convened within either four or six months of the company’s financial year end, depending on whether the company is a listed company.
EGMs are held infrequently and on short notice to deal with situations that arise before annual general meetings. This is usually a matter requiring urgency concerning the management of the company.
An annual general meeting is conducted on any day other than a national holiday and only during business hours, while an Extraordinary general meeting can be carried out on any day including a public holiday and at any time during a day.
People Who Can Call for an EGM in Singapore
An extraordinary general meeting may be called by the following groups of people:
Why EGMs Are Conducted?
In an extraordinary general meeting, any urgent matters concerning the administration of the company’s affairs which require the input of the members concerned are discussed. It has been specified in the Companies Act that ordinary and special resolutions alike may be used for the purposes of an EGM. There are various reasons why an EGM may have to be held at any time. EGMs also have several distinct purposes, of which some are the following:
Extraordinary general meetings also include the information and facts that enable members to understand the meaning and the implications of the related matters and the scope of such business matters, allowing them to make better decisions.
Conclusion
All the meetings other than the ones which are annual general meetings are classified as extraordinary general meetings. The board of directors of the company has the power to call an extraordinary general meeting whenever, in its opinion, it deems fit. EGMs are usually held during the gap between two consecutive annual general meetings.
If an urgent matter arises between the two annual general meetings, it can be handled by way of holding an extraordinary general meeting. As long as the shareholders and board of directors have given their approval, an extraordinary general meeting may be called.
FAQs
Yes, with effect from 31 August 2018, a private company can be exempted from holding AGMs if the financial statements are being sent to all relevant members within 5 months after the financial year–end.
If your company does not comply with the AGM requirements, the directors of your company can be prosecuted in court or being disqualified or debarred as the director of the company. Also, your company might be fined by ACRA.
You can engage with an expert from Paul Hype Page. Paul Hype Page is a Full Practicing Member of the Institute of Certified Public Accountants of Singapore (ICPAS) and also registered as a Public Accounting Firm with ACRA.
Every business owner must register his/her business with ACRA as long as he/she is conducting any continuous activity for profit.
You need to provide the following information when you file the annual return:
- Company details
- Shares
- Financial Statements
- Date of Annual General Meeting (if applicable)
All companies that are incorporated in Singapore are required to file annual returns with ACRA as per the Companies Act.
It depends on the size of your company. If your company has only 1 director, then this director is the only person who needs to acknowledge on documents submitted with the annual returns; if your company has more than 1 director, your company will need at least 2 directors to acknowledge on documents submitted with the annual returns
Your company will be fined for S$300 late lodgement fee should you submit the annual returns after the deadline.
The directors and company secretary are the only people who may apply for striking off because they are the company officers.
Section 171 of the Companies Act requires a company to appoint a company secretary. The position of secretary must not be left vacant for more than 6 months at any one time. Private limited companies need not appoint a professionally qualified secretary. However, a secretary must nevertheless be appointed. Only public companies must appoint a professionally qualified secretary.
Examples of professionally qualified secretaries include lawyers, accountants, and chartered secretaries. It should be noted that merely having ties to an accounting or a law firm does not automatically make one a professionally qualified secretary.