If you have ever been a shareholder in a company, you might have heard of the term AGM. AGM stands for Annual General Meeting, which is a yearly meeting held by a company’s shareholders to discuss and vote on important matters related to the company. In this article, we will dive deeper into the AGM full form and meaning, its purpose, and its importance.
What is AGM?
The Annual General Meeting or AGM is a mandatory yearly meeting that companies must hold, as per the Companies Act of 2013.
This meeting is held between the shareholders and the company’s management to discuss important matters related to the company.
The AGM is usually held at the end of the financial year and is a platform for shareholders to voice their opinions and vote on matters that will affect the future of the company.
Purpose of AGM
The primary purpose of the AGM is to provide an opportunity for shareholders to engage with the company’s management and board of directors, discuss important matters related to the company, and vote on resolutions that impact the company’s future.
The AGM is also a platform for the company to present its financial statements, including the profit and loss statement, balance sheet, and cash flow statement, to the shareholders.
Importance of AGM
The AGM is a crucial event for a company as it enables shareholders to hold the company’s management accountable and influence the company’s decision-making process.
The AGM provides a platform for shareholders to voice their opinions and vote on issues that are important to them.
Additionally, the AGM helps to build trust between the company’s management and the shareholders, which is vital for the long-term success of the company.
The AGM agenda includes various items that must be addressed during the meeting. Some of the essential items on the agenda include:
1. Approval of Minutes
The minutes of the previous year’s AGM are usually presented to the shareholders for approval.
2. Presentation of Financial Statements
The company presents its financial statements, including the profit and loss statement, balance sheet, and cash flow statement, to the shareholders for review and approval.
3. Appointment of Directors
Shareholders can vote on the appointment of directors or reappointment of existing directors.
4. Appointment of Auditors
Shareholders can also vote on the appointment of auditors to audit the company’s financial statements.
5. Declaration of Dividend
The company’s board of directors can recommend the payment of a dividend to shareholders, which must be approved by the shareholders.
6. Any Other Business
Shareholders can raise any other business or matter that they wish to discuss during the AGM.
In conclusion, the AGM or Annual General Meeting is a mandatory yearly meeting held by companies to discuss important matters related to the company.
The AGM provides an opportunity for shareholders to engage with the company’s management, hold them accountable, and influence the company’s decision-making process.
The AGM is an important event for companies as it helps to build trust between the management and the shareholders, which is essential for the long-term success of the company.
Q1. Who can attend the AGM?
Ans: Any shareholder of the company can attend the AGM.
Q2. Can shareholders vote on matters remotely?
Ans: Yes, shareholders can vote on matters remotely through postal ballot or e-voting.
Q3. What happens if a shareholder cannot attend the AGM?
Ans: If a shareholder cannot attend the AGM, they can appoint a proxy to attend the meeting on their behalf.
Q4. Is attendance at the AGM mandatory?
Ans: No, attendance at the AGM is not mandatory
Q5. Can the AGM be held virtually?
Ans: Yes, the AGM can be held virtually, especially in light of the COVID-19 pandemic. The Ministry of Corporate Affairs has provided guidelines for companies to conduct virtual AGMs.
Q6. What happens if a quorum is not present at the AGM?
Ans: A quorum refers to the minimum number of shareholders required to be present at the AGM to conduct the meeting. If a quorum is not present, the meeting cannot be conducted and will be adjourned to a later date.
Q7. Can shareholders ask questions during the AGM?
Ans: Yes, shareholders can ask questions during the AGM. The management is required to answer the questions to the best of their ability.
Q8. How long does the AGM usually last?
Ans: The duration of the AGM depends on the agenda and the number of shareholders attending the meeting. Typically, the AGM lasts for a few hours.
Q9. What is the difference between AGM and EGM?
Ans: EGM stands for Extraordinary General Meeting, which is a meeting held by a company outside of the mandatory AGM to discuss specific matters. The AGM is held annually, whereas the EGM can be held as and when required.
Q10. Can non-shareholders attend the AGM?
Ans: Non-shareholders are not permitted to attend the AGM unless they have been authorized to do so by the shareholders.