How to Conduct Annual General Meeting of a Company? An Easy Guide

The Annual General Meeting is the meeting of all the members/shareholders and other stakeholders of a company. The AGM is held to discuss and approve certain businesses.

The Annual General Meeting (AGM) is one of the requirements a company has to fulfill on a regular basis. Section 132 of the Companies Act 2017 requires every company (other than a single-member company) to hold an annual general meeting.

A newly incorporated company must hold its first annual general meeting within Sixteen (16) months from the date of incorporation. However, there is no restriction if the company holds its first general meeting within a shorter period to match its financial year. For example, if your company was incorporated on the 1st of January, the first AGM will be due by the 30th of April of the following year. If your financial year ends on 30th June, you can hold your first Annual General Meeting anytime after June. This will help you in accounting for the next financial year, starting on July 01.

After 1st year, you will hold the Annual General Meeting of your company within 120 days of the end of the financial year. If your financial year ends on June 30 every year, you must hold the annual general meeting of your company latest by 28th October.

And don’t forget to file the annual return of the company to the concerned registrar within 30 days of the annual general meeting.

A company may set its financial year at the time of incorporation and it may be changed later. Usually, the companies set their financial years starting from July 1 to June 30 of the next year. This helps them to correspond their financial year with the tax year which ends on June 30, each year. However, a company may set its financial year from the first day of any quarter of a calendar year in the following manner:

January 01 to December 31
April 01 to March 30 next year
July 01 to June 30 the following year or
October 01 to September 30 next year

Since the annual general meeting is the meeting of all the members/shareholders and other stakeholders of the company, you must send notice to all of them. The board of directors of a company in their meeting shall fix a date for the annual general meeting and give notice to all the members/shareholders and other stakeholders.

The Companies Act, 2017 requires that a company must send a notice of the meeting at least twenty-one (21) days before the date fixed for the meeting. The company must give notice of the annual general meeting to all the members and every person who is entitled to receive notice. If the company is a listed company, it must send a copy of the notice to the SECP. Additionally, the notice must be published in English and Urdu newspapers of nationwide circulation.

Notice of the annual general meeting must contain the place of the meeting, and the date and time when the meeting is to be held. A statement of business to be transacted at the meeting must also be attached to the notice.

Notice of the meeting must be served to a member and another stakeholder, if any, at his registered address in Pakistan. If the member or stakeholder does not have a registered address, the company should serve notice at the address provided to the company for that purpose. The notice may be served by any of the following means:

By hand against an acknowledgment
By post
By courier
By electronic means
Notice to the joint-holder may be served by giving notice to the joint-holder whose name appears first in the register of members.

If your company is a private limited company or an unlisted public company, you can hold your annual general meeting at any place like board meetings. However, if your company is a listed company, the meeting must be held in the city in which the company has its registered office or in the nearest city.

Since the annual general meeting is held every year, certain transactions must be considered at the meeting. The usual businesses at the general meeting are:

(a) consideration of financial statements and the reports of the board and auditors;

(b) declaration of any dividend;

(c) election and appointment of directors in place of retiring directors; and

(d) appointment of the auditors and fixing their remuneration.

All other businesses at the annual general meeting shall be treated as special businesses.

If any special business is to be transacted at a general meeting, a statement setting out all material facts concerning such business must be attached with the notice of the meeting. The statement should include the nature and extent of the interest in the business, if any, of every director, whether directly or indirectly. In case the business consists of according to approval to any document by the meeting, the time and the place where the document can be inspected must also be specified in the statement.

The quorum for the annual general meeting in the case of a private or unlisted public company is at least two members representing Twenty-five percent of the total voting power. The presence of the required member may be in person or through a video link and the voting power may be of their own or as proxies. The number of members or voting power required to form a quorum may be more if provided in the articles of the company.

In the case of a listed company, the quorum shall be at least ten members in person or through video link, representing Twenty-five percent of the voting power of their own or as proxies. Again, the number of members or voting power may be more than that if the articles of the company provide a higher number.

The chairman of the board of directors of the company, if any, shall preside as chairman at the annual general meeting. However, if there is no chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for the meeting, or he is unwilling to act as chairman, any one of the directors present may be elected to be the chairman. In case none of the directors is present or is unwilling to act as chairman, the members present in the meeting shall choose one from amongst themselves.

Yes, an annual general meeting can be adjourned in certain cases. If on the day and time fixed for the meeting, the quorum is not present within half an hour, then the meeting shall be adjourned to the same day in the next week at the same time and place. If the quorum is also not present within half an hour from the time appointed for the meeting, the members present personally or through video link being not less than two shall be a quorum. However, this will be subject to the articles of the company and in case a higher number is provided in the articles that shall be the quorum.

All the business at the annual general meeting shall be transacted in the form of resolutions. Each agenda item shall be presented for discussion and approval by the members.

In the case of a company having a share capital, every member shall have voting rights proportionate to his shareholding in the company. For example, if the company has issued ordinary shares and each share carries one vote, a member shall have voting rights equal to his shares. If the company has issued shares of any other class, the members shall have voting rights equal to the number of shares multiplied by the number of voting rights attached to the shares. However, in the case of a company having no share capital, every member shall have one vote.

In the case of a company having a share capital, every member shall have voting rights proportionate to his shareholding in the company. For example, if the company has issued ordinary shares and each share carries one vote, a member shall have voting rights equal to his shares. If the company has issued shares of any other class, the members shall have voting rights equal to the number of shares multiplied by the number of voting rights attached to the shares. However, in the case of a company having no share capital, every member shall have one vote.

As mentioned above, initially the voting on a resolution is conducted through a show of hands. However, before or after the declaration the chairman may on his own motion order for voting through a poll. However, if members in person or through video link or proxy, representing one-tenth of the total voting power, demand a poll, the chairman must order voting through a poll. The polling may be ordered by the chairman to be conducted through secret balloting or on the demand of members representing one-tenth of the voting power.

A poll demanded on the election of a chairman or on a question of adjournment of the meeting shall be taken at the same time. However, if the poll is demanded on any other question it shall be taken at such time as the chairman of the meeting may direct but not later than 14 days from the day on which it was demanded.

Hope you have got a fair idea about what an annual general meeting of a company is and how it is conducted. This will help you to meet the requirements of the law. However, you can contact us for any clarification or leave a comment below.