What Are The Responsibilities After Dispensation Of AGMs?
There are times when private limited companies can opt out of the Annual General Meeting (AGM). This is legally possible when companies file a resolution unanimously prepared by all its members.
Even with this, however, companies who have decided to dispense the AGM would still have to fulfill certain obligations. These include the preparing of the company’s financial statements, such as balance sheet, every end of the financial year. Companies who have dispensed the AGM would also need to send their financial statements, as well as other documents (like the Director’s Report and Statement), to its stockholders.
Whenever the company comes up with a new written resolutions, these should be passed by written means to other members of the company. One must also keep in the Minute Book a record of all the resolutions and decisions it has arrived at for record-keeping purposes. This will be in lieu of the AGM’s role in serving as an avenue for stockholders to be informed about these resolutions in the form of a reportage.
Since the stockholders will not be physically present together to approve these resolutions as a body, the written resolutions circulated to them must still secure approval on or before the six months following the financial year-end of the company. An approval is achieved when the majority of the stockholders with voting rights signify their approval or agreement with the resolution at hand.
Sections 184 (3) and (4) of the Companies Act further qualifies that, in the case of a special resolution, approval from a three-quarter majority of members is needed, while a majority approval is required for the passage of an ordinary resolution.
Within one month after the formal agreement of the resolutions, a private company that has decided to dispense with the AGM must still file the appropriate Annual Return or AR. The AR must bear the dates the resolutions were formally agreed upon under the field “Date of Annual General Meeting.”