04 July 2024
Editor: ET
In an effort to streamline corporate governance and reduce administrative burdens, Singapore has introduced exemptions for private companies from holding Annual General Meetings (AGMs) under certain conditions. Effective from 31 August 2018, these exemptions can significantly ease the operational processes for private companies.
Further Reading: Creating a Financial Plan for Your Start-Up in Singapore
This article delves into the specifics of these exemptions and the safeguards in place to protect the interests of shareholders.
Exemptions Criteria
Private companies in Singapore can be exempted from holding AGMs if they meet the following criteria:
Financial Statements Distribution: Companies must send their financial statements to all members within five months after the financial year-end.
Safeguards for Members
To ensure that the interests of shareholders are protected, the exemption from holding AGMs is subject to several safeguards:
Member's Right to Request an AGM
Any member wishing to request that an AGM be held must notify the company no later than 14 days before the end of the sixth month after the financial year-end.
Directors’ Obligation to Hold an AGM
Directors must hold an AGM within six months after the financial year-end if notified by any member of the company.
The company may seek the Registrar’s approval for an extension of time to hold the AGM by the deadline (i.e., before the end of the six months after the financial year-end).
General Meeting for Financial Statements
If any member or auditor requests for it no later than 14 days after the financial statements are sent out, private companies must hold a general meeting to lay the financial statements.
Directors must hold this general meeting within 14 days of the request.
Dormant Relevant Companies
Private dormant relevant companies, which are exempt from preparing financial statements, are also exempt from holding AGMs, subject to the same safeguards mentioned above.
Definition of a Private Dormant Relevant Company:
A private company that is dormant (no significant accounting transactions during the financial year).
Not listed or a subsidiary of a listed company.
Has total assets less than or equal to $500,000 (consolidated value if it is an ultimate parent).
Benefits of AGM Exemptions
Reduced Administrative Burden: Companies can save time and resources by not having to organize and hold AGMs.
Flexibility: Allows companies to focus on business operations while still maintaining transparency through the distribution of financial statements.
Improved Efficiency: Streamlines corporate processes, making it easier to manage compliance requirements.
Seeking Professional Guidance
Navigating the regulatory landscape can be complex. For personalized advice and assistance in understanding AGM exemptions and other corporate governance matters, consult the experts at Expede.com.sg. Their professional services can help ensure that your company remains compliant while taking full advantage of regulatory benefits.
The exemption from holding AGMs offers significant advantages for private companies in Singapore, provided they adhere to the necessary safeguards. By understanding and implementing these exemptions, companies can streamline their operations and focus more on growth and development.
For comprehensive support and expert advice, reach out to Expede.com.sg.
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