Calling an AGM
An AGM is simply a General Meeting of members that is held annually.
It is possible that the Articles of Association do not state that an AGM must be held. (This is common with companies registered before 2006 as the previous companies acts all required companies to hold an AGM and therefore there was no need to incorporate this requirement in the Articles of Association). This changed when Part 13 (sec281 – sec361) of the Companies Act 2006 came into effect on 1 October 2007. The 2006 Companies Act now applies by default and unless the Articles of Association are amended by special resolution to require an AGM there is no longer any requirement to hold one unless the meeting is called by:
a) The Directors – giving 14 clear days’ notice or any longer period stated in the Articles (s307). Note that the clear days includes weekends and bank holidays (Model Articles s41(5)). The 14 days’ notice can be reduced or waived provided the holders of at least 90% of the voting rights agree (unless a greater percentage is required by the company articles up to a maximum of 95%). (s307(4)).
b) One or more Members – A member who has more than 5% of the voting rights may ask the directors to call a general meeting.
Note: To discourage members from regularly requesting meetings, the percentage is increased to 10% if a meeting has already been held within the past 12 months. The percentage relates to the voting rights, not 5% of the number of members so a single, large shareholder could make the request.
Within 21 days the directors must resolve to call the meeting and then it must actually be held within 28 days of the notice date (s304). If the directors do not convene the meeting, s305 enables the members to do so at the company’s expense.
- Whoever convenes the meeting must send the notice to every member, every director and anyone notified to the company as being entitled to a share on the death or bankruptcy of a member (subject to the articles) (s310).
- The notice can be sent electronically to members including being posted on the company website (s308/309).