An Annual General Meeting (AGM) is one of the statutory requirements for all companies. It is an annual meeting where the directors will present the company financial statements as well as other related matters to the shareholders. The shareholders are essentially the owners of the company and the directors are working for the shareholders. The AGM ensures that there is accountability in the directors’ dealing of company matters.
The AGM is a very important event and the Accounting and Corporate Regulatory Authority (ACRA) needs to be informed about the holding of the AGM in the Annual Return Filing, another statutory requirement, of the company. Failure to hold an AGM may result in penalties imposed by ACRA. The company and its directors will be given composition fines for every breach. They may also face prosecution for the offence. There are three instances whereby ACRA may choose to prosecute the company and its directors for failing to hold an AGM.
- If the directors fail to register and attend the Directors Compliance Programme for first-time offenders.
- If the company and directors fail to pay the composition fine within a stipulated time period and the offer for composition has lapsed.
- If ACRA is not prepared to allow the directors to compound the offence.
Here is a guide to the composition fines that will be levied on the company and its directors for failing to hold an AGM
Before summons is issued: Composition fine of $300 per breach
After summons is issued: Composition fine of $600 per breach
When Warrant of Arrest is issued: Composition fine of $900 per breach
Please note that these composition fines pertain to the failure to hold an AGM. Late lodgement fees will also be imposed for every return that is lodged late.
Here are some high profile cases which made it to the news. These cases are related to failures of directors to hold their AGM and file their Annual Return.
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When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Acra Filing Agent
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