All about Exemptions and Dispensation of AGMs


In light of safe distancing measures to be undertaken due to COVID-19, you might have difficulties holding a physical annual general meeting ("AGM") for your Company. If you wish to find out more about exemptions from holding AGMs and dispensations of AGMs, here is a short blog post on what you need to know.

DIFFERENCE BETWEEN EXEMPTION AND DISPENSATION

When a Singapore-incorporated company is exempted from holding an AGM, it means it is not required under applicable laws and regulations such as the Companies Act, Chapter 50 ("Companies Act") to hold an AGM.

When a Singapore-incorporated company dispenses with the holding of an AGM, it means that the company may pass written resolutions under Section 184A of the Companies Act for matters that would have been tabled at an AGM, instead of holding an AGM where shareholders are required to be physically present.

YOUR COMPANY DOES NOT NEED TO HOLD AGM IF...

This is only applicable if your Company is a private company and: -

  1. All shareholders of your Company have passed a resolution to dispense with the holding of AGM; 
  2. Your Company sends its financial statements to all shareholders and company auditors (if any) within five months after the financial year end; or
  3. Is a private dormant relevant company, which is exempted from preparing financial statements.

Your Company is a “private dormant relevant company” if it is a private company which is dormant, and that is neither listed nor a subsidiary of a listed company. The consolidated total assets of your Company and its subsidiaries (if any) also cannot exceed S$500,000.

SAFEGUARDS TO PROTECT SHAREHOLDERS' INTERESTS

The Companies Act has prescribed certain safeguards to protect the interests of shareholders, so that private companies cannot unilaterally decide on the exemption and/or dispensation of AGMs.
The exemption from holding AGMs or dispensation of AGMs is subject to the following safeguards:
  1. A shareholder may request for an AGM to be held. Such request must be notified to your Company no later than 14 days prior to the end of the sixth month after the financial year end.
  2. Your Company must hold an AGM within 6 months after the financial year end upon receipt of any shareholder's request to do so, although you may apply to ACRA for an extension of time to hold AGM by the deadline (i.e. before the end of the six months after the financial year end).
  3. Your Company must, within 14 days after the date of request, hold an AGM to table and adopt the financial statements.

ACTIONS REQUIRED

Exemptions from holding AGMs and dispensations of AGMs are not applicable to listed companies and hence, they are required to hold virtual AGMs to comply with the relevant rules and regulations.  

In times like this where you need to observe safe distancing measures, consider the options available to your Company: -

  1. Hold a physical AGM?
  2. Hold a virtual AGM?
  3. Dispense with holding of AGM?
  4. Pass written resolutions to approve AGM matters?

Whatever options you go for, make sure you comply with the Companies Act and your Company's Constitution. If in doubt, feel free to reach out to us. We can connect you to professional corporate secretarial service providers who can assist your Company.

 


Leave a comment


Please note, comments must be approved before they are published


Related Posts

Understanding Register of Nominee Directors
Understanding Register of Nominee Directors
The requirement to maintain register of nominee directors took effect on 31 March 2017 along with the requirement to ...
Read More
Update Changes in Personal Particulars with ACRA
Update Changes in Personal Particulars with ACRA
In our blog post on “Update Changes in Company Officers and their Particulars”, we shared that certain personal parti...
Read More
Alternatives to Sealing
Alternatives to Sealing
As mentioned in our earlier blog post, it is no longer a mandatory requirement for companies incorporated in Singapor...
Read More