Annual General Meeting

At an Annual General Meeting (AGM) a company will consider ordinary business.

This includes:

• Directors’ recommendation to declare a dividend
• Election of directors
• Financial statements, the directors’ report and the auditor’s report
• Re-appointment of the outgoing auditors or the appointment of new auditors and the fixing of auditors’ remuneration
• Any other special business, such as the amendment of the constitution of the company

General Company Meetings

Company law provides for two types of meeting of a company, namely an Annual General Meeting and an Extraordinary General Meeting. General meetings of the company are meetings of the members and the directors at which certain company business is conducted.

Annual General Meeting

Every company is required to hold an annual general meeting (AGM) every year. No more than 15 months should elapse between each meeting. The only exception to the requirement to hold an AGM is in the case of a single member private limited company, where the sole member may decide to dispense with the holding of an AGM. The AGM must be held in the State unless otherwise provided for in the Articles of Association or constitution or where all the members of the company agree.

The main purpose of the A.G.M. is to present the accounts, the directors are required to present audited financial statements to the members at each AGM (or unaudited financial statements where the company is eligible to, and has decided to, avail of the small company audit exemption.) A company cannot avail of audit exemption if their current or last annual return was late being filed. A report by the directors must also be annexed to the financial statements presented to the members at the AGM. The AGM can be held outside Ireland if permitted in the company’s Articles.

Extraordinary General Meeting

As the term suggests, an extraordinary general meeting of the company deals with matters outside the normal business conducted at an AGM. Under certain circumstances company directors are required to convene an EGM of the company, e.g. directors are under a duty to convene an EGM where the company’s net assets have fallen to 50% or less of its called-up share capital.

Special Resolution

With special resolutions, which tend to deal with structural and important company matters, majorities of either two thirds or three quarters are normally required depending on the Memorandum and Articles of Association or the constitution. A special resolution and an amended Memorandum and Articles of Association or constitution are required to be filed within 15 days of the passing or making of the resolution.

At an AGM, a company will generally consider ordinary business, such as:

• Directors’ recommendation to declare a dividend, if a recommendation has been made
• Financial statements, the directors’ report and the auditor’s report
• Election of persons as directors in the place of those retiring
• Re-appointment of the outgoing auditors or the appointment of new auditors and the fixing of auditors’ remuneration
• Amendment to the Constitution of the company, which is known as special business

The annual general meeting must be held within eighteen months of incorporation and every year thereafter provided that no more than fifteen calendar months do not elapse between them.

• A profit and loss account or, an income and expenditure account if the company is not trading for profit
• A balance sheet
• A director’s report
• An auditor’s report

These documents are required to be annexed to the Annual Return of a limited company.

In addition, there must be a certificate, signed by both a director and the company secretary, certifying that the report and accounts are true copies of those laid before or to be laid before the company’s annual general meeting.

If a company fails to comply with the requirements of Companies Act, the annual return will be rejected. In addition the company and every officer of the company who is in default, will be liable to a fine.

Right to notice of meetings

At least 21 days’ notice must be given in writing of an AGM. In the case of an EGM, 7 days’ notice is required for private companies and 14 days for public companies. The 7 day period for private companies can be shortened where the members and the company’s auditors agree to such shorter notice. However, 21 days is usually required in order to pass a special resolution, unless 90% of the members of the company agree to shorter notice.

Extended notice of 28 days must be given under the following circumstances:

• Where a resolution to remove a director is proposed-unless the articles of association or the constitution of the company provide otherwise
• Where a resolution to replace an auditor is proposed at an AGM or to remove an auditor before the expiration of his term of office is proposed

The meeting must be properly convened by notice, a quorum must be present and the meeting must be presided over by a chairman. A quorum is generally fixed at two members in the case of a private company and three in the case of a public company. Special resolutions and certain other significant resolutions must be forwarded by the company to the Registrar of Companies within 15 days of their being passed.

Where a company’s articles of association so provide, a resolution in writing signed by all of the members entitled to attend and vote on such a resolution at a general meeting is as valid and effective as if the resolution had actually been passed at a general meeting.

Polls

The standard articles provide that every resolution shall be decided by a show of hands unless a poll is demanded. The standard articles then go on to set out when, and by whom, a poll may be demanded. Unless a poll is demanded, a declaration by the Chairman that a resolution has been carried or lost on a show of hands will be conclusive evidence of the proceedings.

Under the standard articles of association, a poll (vote) may be demanded as follows:

• By the chairman of the meeting
• By at least three members in person or in proxy
• By any member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all the members having a right to vote at the meeting
• By a member or members holding shares conferring voting rights, being shares on which an aggregate sum has been paid up equal to at least 10% of the total amount paid up on all voting shares

The members of a company can of course alter the terms of the standard articles of association on incorporation or the constitution or subsequently (provided that 75% of the members agree). However, where the articles are amended with regard to when a poll can be demanded, any changes will be void if they seek to have any of the following effects on entitlement to demand a poll:

• To exclude the right to demand a poll at a general meeting
• To make ineffective a demand made by any of the following parties
• Not less than 5 members having the right to vote
• A member or members representing not less than one tenth of the total voting rights of all the members having a right to vote
• A member or members holding shares in the company conferring a right to vote, being shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all shares conferring that right.

Proxies

Any member of the company who is entitled to vote at a general meeting of the company can appoint a proxy. A proxy is a person nominated by the member to attend the meeting and to exercise the member’s vote on their behalf. A proxy is also entitled to speak at the meeting on behalf of the member.

Under the standard form articles, the following provisions apply to proxies:

• The proxy must be nominated in writing and the nomination signed by the member if on behalf of an individual
• If the proxy is nominated on behalf of a company, the appointment must be stamped with the company seal
• The appointment must be furnished to the company at least 48 hours prior to the meeting.