Overview of Annual General Meeting and Annual Return Breaches
A director of a company incorporated under the Companies Act, Cap 50 ('the Act') has to comply with a number of statutory obligations under the Act. The following are two of the statutory obligations which ACRA takes enforcement action against.
Section 175 of the Act requires the company to hold an Annual General Meeting (AGM). Listed companies are to hold the AGM within 4 months after Financial Year End (FYE), while any other company is to hold their AGM within 6 months after FYE. Private companies may not need to hold an AGM if they meet the criteria specified in section 175A of the Act (elaborated below).
Section 197 of the Act requires a listed company to file Annual Returns (AR) within 5 months after FYE, and for all other companies, within 7 months after FYE. For companies having a share capital and keeping a branch register outside Singapore, Annual Returns must be filed within 6 months after FYE in the case of a listed company or within 8 months after FYE in the case of a company that is not listed.
Section 175A sets out the criteria where private companies need not hold an AGM:
if all members have approved a resolution to dispense with the holding of AGMs;
if the company sends their financial statements to members within 5 months after the FYE; or
if the company is a private dormant relevant company that is exempt from preparing financial statements.
The following safeguards are put in place:
1. A member who wishes to request that an AGM be held must notify the company to hold an AGM not later than 14 days before the last day of the 6th month after FYE;
2. Directors must hold an AGM within 6 months after FYE if notified by any one member of the company to do so. The company may seek the Registrar’s approval for an extension of time to hold AGM; and
3. Private companies must hold a general meeting to lay financial statements if any member or auditor requests for it not later than 14 days after the financial statements are sent out. Directors must, within 14 days after the date of request, hold a general meeting to lay the financial statements.
The AR provides critical information that helps the company’s stakeholders to make informed decisions. The AR is an electronic form lodged with ACRA through its online filing system – Bizfile+ and contains important particulars of the company such as the name of the directors, its members, and the date to which the financial statements of the company are made up to.
*Note: For companies with Financial Year Ending before 31 Aug 2018, the following statutory obligations and deadlines are still applicable
1. Section 175(1) of the Act - The company must hold its first AGM within 18 months of incorporation, and subsequent AGMs yearly at intervals of not more than 15 months
2. Section 197(1)(b) of the Act - The company is required to lodge an AR within 30 days after its AGM. A company having a share capital and keeping a branch register in any place outside Singapore, is required to lodge an AR within 60 days after its AGM.
3. Section 201 of Act - The directors of the company are required to lay at the AGM, financial statements that are made up to a date:
o Not more than 6 months before the date of the meeting (if the company is not a listed company); or
o Not more than 4 months before the date of the meeting (if the company is a listed company).
When a company/director lodges an AR through ACRA's online filing system, BizFile+, the following information is required in the AR form:-
1. The date the financial statements are made up to; and, if applicable
2. The date the AGM is held for laying the financial statements in (a).
If the company has dispensed with the holding of AGM or qualifies for the AGM exemption and a member requests for an AGM to be held after the company has filed an AR, the company is required to lodge a “Notification of AGM” online through Bizfile+. The following information is required in the form:
1. Date of member’s request for AGM to be held; and
2. Date of AGM
Upon filing of the Annual Return (AR) in ACRA’s online filing system, Bizfile+, a late lodgement fee will be imposed for the late filing of the AR. ACRA may separately take enforcement action for the AGM and AR breaches which includes offering of composition sum or prosecution action.
Should you need an expert advice in regard to this matter, contact us now for a non-obligatory consultation.
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