The Complete Guide to Singapore Company Meetings
Are you wondering about the different kinds of company meetings that a business may need to hold after incorporating in Singapore? The best way to remain compliant with the nuances of Singapore law is to connect with a corporate services provider.
To reach out a professional who can help you navigate the complexities of mandatory meetings, contact us. Otherwise, read this comprehensive overview to learn about the different types of Singapore company meetings you should be aware of.
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Introduction to Different Types of Company Meetings in Singapore
Upon incorporating, a Singapore company acquires a legal identity that’s distinct from that of its members. However, the company is an artificial entity and cannot act on its own; it must seek the input of its members for any salient decisions.
Therefore, the company must organize shareholder and director meetings where such decisions can be made. A company meeting is a gathering of its shareholders and/or directors to transact any lawful business.
A Singapore company is required by law to hold different kinds of company meetings. The company law in Singapore and the constitution of the company govern the conduct of the different types of company meetings that are legally mandatory in Singapore.
Because companies differ in size, business, directors, members, shareholders, constitutions, etc., the frequency and format of their meetings may also differ. While the law provides basic statutory requirements, the rules and regulations of the constitution specify the process and format for holding these meetings. Different types of company meetings are broadly divided into two main categories: shareholders’ meetings and directors’ meetings.
The shareholders of a company are its actual owners. Their shares represent part ownership of the company. Additionally, their ownership entitles shareholders to decide on certain business matters that require their approval.
These meetings give shareholders an opportunity to exercise control over company affairs. They do so by approving business matters that the company proposes in the meeting.
The different types of company meetings include the first meeting (i.e., statutory meeting), shareholder annual general meetings and extraordinary shareholder meetings as described below.
Shareholders’ First Meeting (i.e. Statutory Meeting)
The shareholders’ first meeting (known as the statutory meeting of the company) is a mandatory meeting of the shareholders of a public company. The company must conduct this meeting within a specified period from the commencement of business.
A company may conduct this meeting only once in its lifetime. The company directors will send a report (i.e., the “statutory report”) consisting of company details to all members seven days prior to the statutory meeting date. The company must also submit a copy of the report to the registrar seven days before the statutory meeting date.
What Is a Statutory Meeting?
The statutory meeting is held with the purpose of:
1. Discussing essential shareholder matters, including:
- Company progress from its incorporation date
- Company growth expectations
- Contractual obligations
- Future plans and prospects.
2. Discussing the statutory report, which provides details such as:
- Share allotment structure
- Number of shares issued
- Total receipts and payments
- Name of company directors, CEO, company secretary, auditors, etc
Shareholders’ Annual General Meeting (AGM)
After the statutory meeting of the company that follows its inception, it is mandatory for a Singapore company to conduct a shareholder annual general meeting every calendar year at specified intervals.
This meeting — known as the annual general meeting (AGM) — gives company shareholders the right to participate in certain company decisions, which require their approval. One of the primary purposes of the annual general meeting is to evaluate company financial statements.
Extraordinary Shareholder Meeting (EGM)
Procedure for Shareholder Meetings
In certain circumstances, shareholders may wish to propose a resolution at a meeting. In this case, shareholders must give special notice of the resolution to the company 28 days before the date of the meeting. The company will send this notice to the members at least 14 days before the meeting.
The purpose of sending special notice is to invite special attention to a particular resolution that shareholders wish to propose in the upcoming meeting.
The special notice is required to pass resolutions for the following matters:
- Removal of directors
- Removal of auditors from their office before their term expires
Besides these procedures, it’s important to understand the passing of resolutions in company meetings as explained below.
Company shareholders make decisions by passing resolutions. When a resolution is passed at a shareholder meeting, it means the shareholders agree to a proposition put forth by the company.
The Companies Act provides for two kinds of resolutions: ordinary and special. Unless the act specifically states the requirement of a special resolution, the passing of the ordinary resolution will suffice.
The passing of these resolutions is determined by way of a percentage. Company law fixes this percentage, but the company may increase the percentage requirement through its constitution.
Substantial company decisions require no less than 75% majority (for special resolutions). Other decisions require a simple majority of no less than 50% (for ordinary resolutions). These resolutions are explained below:
Ordinary or routine business matters require the passing of an ordinary resolution, which is by means of a simple majority of at least 50%. Most company decisions require an ordinary resolution.
Below are a few examples of matters that require the passing of an ordinary resolution:
- Dividend declaration
- Appointment and remuneration of auditors
- Electing directors in place of retiring directors
Special business transactions of the company require a majority of at least 75% to pass a special resolution. This resolution is for major business decisions or changes to the company.
Below are a few examples of matters that require a special resolution:
- Alteration to clauses in the constitution
- Reduction in the share capital of the company
- Change of company name
Resolution by Written Means
A written resolution is a resolution that the company does not pass at a shareholder meeting. Instead, the company circulates the proposed resolution to shareholders for their approval.
A private company can pass an ordinary or special resolution by written means instead of holding a shareholder meeting. The company circulates the resolution to its shareholders for approval. The majority required for approval is on the same basis as ordinary and special resolutions.
The constitution of a Singapore company outlines the proceedings of a directors’ meeting. Company law in Singapore does not have any specific regulations for board meetings. However, company law authorizes the board of directors to meet and execute business decisions at meetings.
The constitution states the requirements such as quorum, notice, etc., and the company must comply with the rules and regulations as set in the constitution. Any company director may summon a meeting.
The decision of matters discussed in the directors’ meeting are based on the majority of director votes. In the case of equal votes, the chairman of the meeting will have a casting vote. A director cannot vote on any matter wherein he or she has any personal interest. Avoidance of any conflict of interest is an important duty of a director.
Default and Its Consequences
To avoid the negative consequences of breaching the provisions of Singapore law that governs company meetings,It’s essential for all companies to closely monitor how they conduct their meetings.
To ensure your company complies with all the requirements and provisions pertaining to its meetings, it’s good practice to engage a corporate services firm that can assist your company in conducting its meetings. Contact us today to make sure your meetings are held in compliance with Singapore company law and your firm’s constitution.
MATTHEW GRENINGER, KAIKO PTE. LTD.