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A General Meeting of Shareholders is a mandatory annual meeting held by a company to enable shareholders to discuss and vote on the most important matters relating to the company. It is an opportunity for shareholders to learn the details of the company's financial status, as well as to make important decisions on its behalf.
The General Meeting of Shareholders is one of the main ways in which shareholders can exercise their right to corporate democracy. Listed companies are required by law to hold such an annual meeting, although unlisted companies may also hold one if they wish.
In some cases, shareholders can use the AGM to table a motion of censure against the Board of Directors or company executives if they are dissatisfied with their performance. If the motion of censure is passed, the board or executives may be removed from office.
What happens at a General Meeting of Shareholders?
The General Meeting of Shareholders is divided into two main parts: the information session and the voting session. During the information session, the Board of Directors and the company's executives present reports on the company's performance during the previous year. This includes the presentation of financial statements, audit reports, corporate social responsibility reports and other relevant reports. In addition, shareholders have the opportunity to ask questions and comment on these reports.
When is a Shareholders' Meeting held?
A Shareholders' Meeting is held annually so that the shareholders of a company can discuss and vote on the most important matters related to the company. The date of the meeting must be set by the company's Board of Directors and must be communicated to the shareholders well in advance so that they can attend.
Generally, the General Meeting of Shareholders is held within the first six months of the company's fiscal year, although this may vary according to local laws and regulations. In addition, the exact date and time of the meeting is usually set out in the company's articles of association.
In addition to the annual meeting, a company may also convene a general meeting of shareholders at any time during the year if deemed necessary to deal with an important matter requiring shareholder approval. This is known as an extraordinary shareholders' meeting. The call for an extraordinary meeting must be made by the board of directors and shareholders must be notified well in advance in accordance with applicable laws and regulations.
Who should attend the General Meeting of Shareholders?
At the General Meeting of Shareholders, the company's shareholders are expected to attend to discuss and vote on important matters relating to the company. In addition to shareholders, other persons who may attend the meeting include members of the Board of Directors, company executives, external auditors and representatives of the media.
Written notice of the date, time and place of the meeting is usually sent to all shareholders on the company's records. If a shareholder is unable to attend the meeting, he or she may give a proxy to another person to attend and vote on his or her behalf. The proxy must be given in writing before the meeting.
In addition to shareholders, members of the board of directors and company executives usually attend the AGM to present reports on the company's performance during the previous year and to answer questions from shareholders. External auditors may also be present to present audit reports and answer questions.
What are the functions of the General Meeting of Shareholders?
The General Meeting of Shareholders is the supreme body of the public limited company and has a number of important functions and responsibilities. These functions include:
- Approving and amending the company's articles of association.
- Electing and dismissing members of the board of directors
- Approving the management report
- Approving the distribution of profits
- Deciding on the issue of new shares
- Authorise special operations
In short, the General Meeting of Shareholders has a critical role in decision-making and oversight of the company. The Board has the responsibility to ensure that the company is well run, that shareholders' interests are protected and that the company is sustainable in the long term.
How do you vote at a Shareholders' Meeting?
At the voting session, shareholders vote on a number of important matters, which may include the election of the Board of Directors, approval of financial statements, approval of dividends, election of auditors and any other matters requiring shareholder approval. Each shareholder is entitled to one vote for each share held, and decisions are made by simple majority unless otherwise specified in the company's by-laws.
In addition to the decisions taken at the voting session, the General Meeting of Shareholders is also an important forum for shareholders to express their views and concerns. Shareholders may ask questions and make comments at the information session, and may also submit proposals and resolutions for a vote at the next annual meeting.
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