For a company in Singapore, there are two primary types of shareholder meetings: the Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM).
1) AGM (Annual General Meeting)
i. What Is A Company AGM?
The AGM is a legally required annual meeting that serves as the principal touchpoint between a company’s management (directors) and its shareholders.
Its primary purpose is to uphold transparency by allowing shareholders to review the company’s performance over the past financial year and to exercise their voting rights on key governance matters.
As a cornerstone of corporate governance under the Singapore Companies Act 1967, the AGM provides a structured opportunity for the presentation of financial statements, discussion of company strategy, and the approval of critical corporate actions. The legal requirement for every company to hold an AGM, unless specifically exempted, underscores its central role in the Singaporean corporate ecosystem.
ii. When Is A Company AGM Held?
AGMs must occur once every calendar year. The deadlines following the company’s Financial Year End (FYE) differ based on the company’s status:
- Listed Companies: Must hold their AGM within 4 months of their FYE.
- All Other Companies (including private companies): Must hold their AGM within 6 months of their FYE.
iii. What Is Decided At A Company AGM?
The agenda for an AGM is generally predictable, focusing on routine but essential governance matters.
- Presentation and Adoption of Financial Statements: The directors are required to present the company’s audited financial statements, the director’s report, and the auditor’s report. Shareholders then vote to formally adopt these accounts.
- Declaration of Dividends: If the company has generated profits and the board recommends a distribution, shareholders vote on the declaration of dividends.
- Election/Re-election of Directors: Directors may retire by rotation as stipulated in the company’s constitution and can stand for re-election, a decision that requires shareholder approval.
- Appointment and Remuneration of Auditors: Shareholders are responsible for appointing the company’s external auditors for the next financial year and approving their remuneration.
- Approval of Directors’ Fees: The fees and other remuneration paid to directors for their services must be approved by shareholders.
2) EGM (Extraordinary General Meeting)
i. What Is An EGM?
An Extraordinary General Meeting (EGM) is defined as any general meeting of a company’s shareholders that is not an AGM.
ii. When Is An EGM Held?
An EGM is convened on an ad-hoc basis to address urgent matters that happens between AGMs and cannot be postponed until the next AGM.
iii. What Is Decided At A Company EGM?
Unlike the routine agenda of an AGM, an EGM focuses on a specific, pre-defined set of resolutions.
EGMs are convened for a wide array of reasons, most of which involve matters that are too critical to delay or require a special resolution (a resolution passed by at least a 75% majority of votes).
Common triggers include:
- Major Corporate Transactions: Seeking shareholder approval for mergers, acquisitions, or the disposal of a substantial part of the company’s assets.
- Constitutional Changes: Altering the company’s constitution or changing the official company name.
- Capital Structure Alterations: Authorizing the issuance of new shares, which may dilute existing shareholdings, or approving a reduction in the company’s share capital.
- Crisis Management: Addressing an unforeseen financial crisis, resolving a major legal dispute, or responding to an urgent demand from a regulatory body.
- Board and Management Changes: Appointing or removing a director or another key executive outside the regular AGM cycle.
- Shareholder-led Initiatives: Providing a forum for shareholders to discuss and vote on proposals related to corporate governance, executive compensation, or environmental policies.
- Director or Shareholder Disputes: Resolving a deadlock among the board of directors or a significant dispute among shareholders regarding the control or direction of the company.
- Voluntary Winding-Up: Passing the required special resolution to commence the voluntary winding-up of the company.
iv. Who Can Call A Company EGM?
The authority to convene an EGM is significantly broader than that for an AGM, reflecting its role as a flexible governance tool.
An EGM can be initiated by several parties:
- The Board of Directors: The board can call an EGM at any time it deems necessary to seek shareholder approval on a pressing matter.
- Shareholders (Members): As stipulated in the Companies Act, members holding at least 10% of the company’s total paid-up shares that carry voting rights can deliver a requisition to the directors demanding that they convene an EGM.
If the directors do not proceed to convene the meeting within 21 days of receiving the requisition, the requisitionists themselves may proceed to convene the meeting. - The Court: In situations where it is impossible to call a meeting in the standard manner, for instance, due to a persistent lack of quorum (minimum number of members that must be present) or a complete deadlock in management, the court has the power to order that an EGM be held.
3) AGM Vs EGM: What’s The Difference?
i. Purpose & Agenda
The most fundamental difference between AGM and EGM lies in their purpose.
- The AGM is focused on a recurring, predictable agenda of corporate housekeeping and annual review, such as approving financial statements and appointing auditors. It is largely backward-looking, reviewing the performance of the past year.
- In contrast, the EGM is convened to address a specific and urgent issue like a merger or a constitutional change. It is inherently forward-looking, as its purpose is to make a critical decision that will shape the company’s future.
ii. Timing & Frequency
- An AGM is a predictable event, held once per calendar year within strict statutory timelines.
- An EGM is unpredictable. It is held as and when needed, with no limit on its frequency.
iii. Convening Power
The power to initiate the meeting also differs significantly.
- An AGM is convened by the company’s directors as part of their statutory duties.
- The EGM, however, can be convened not only by directors but also requisitioned by shareholders holding a 10% stake or, in exceptional circumstances, ordered by the court.
4) Notice Period
Providing proper notice is a mandatory prerequisite for a valid meeting. The notice must clearly state the date, time, and location of the meeting, along with the specific agenda items to be discussed and the full text of any proposed special resolutions.
The minimum notice periods stipulated under the Companies Act are:
- 14 calendar days for meetings where only ordinary resolutions will be passed (typical for most AGMs).
- 14 calendar days for an EGM of a private company where a special resolution is on the agenda.
- 21 calendar days for an EGM of a public company where a special resolution is proposed.
A shorter notice period for an EGM is permissible only if agreed to by a majority of members who hold at least 95% of the total voting rights, a very high threshold that underscores the importance of adequate notice.
5) Formalizing The Decisions Made At AGM & EGM
Finally, decisions at shareholder meetings (AGMs & EGMs) are formalized by passing resolutions:
- Ordinary Resolution: Requires a simple majority (more than 50%) of the votes cast by shareholders present and voting. This is used for routine business, such as appointing directors or auditors at an AGM.
- Special Resolution: Requires a majority of at least 75% of the votes cast. This higher threshold is mandated for significant decisions that can fundamentally alter the company, such as changing its constitution, reducing its share capital, or approving a voluntary winding-up. These are frequently the subject of EGMs.
Read our article to learn more about Ordinary Resolutions and Special Resolutions.
