Summary
- UK public companies must hold an Annual General Meeting (AGM) within six months of their accounting reference date; private companies may do so voluntarily or if required by their Articles of Association.
- The Companies Act 2006 governs AGM requirements, including notice periods, quorum, voting procedures, and post-meeting filing obligations with Companies House.
- Additionally, minutes must be signed and retained for at least ten years, and certain resolutions must be filed with Companies House following the meeting.
- This article is a plain-English guide to AGM legal requirements in the UK, aimed at business owners and directors operating within the UK jurisdiction.
- It has been prepared by LegalVision, a commercial law firm that specialises in advising clients on corporate governance and company law compliance.
Tips for Businesses
Review your Articles of Association before each AGM – they may impose stricter notice periods or quorum requirements than the statutory defaults. File special resolutions with Companies House promptly, update your member register, and ensure minutes are signed by the chairperson and stored securely for at least ten years.
An Annual General Meeting (AGM) is the formal yearly gathering where a company’s shareholders and directors come together to review performance and make key decisions. UK law sets out clear rules governing how companies must run these meetings. This article delves into the requirements of an AGM in the UK to help you achieve legal compliance and effectiveness.
Legal Framework
The Companies Act 2006 is the primary legislation governing your AGMs. This Act outlines your obligations regarding the holding, conducting, and reporting of AGMs.
Additionally, your Articles of Association may impose further requirements. These additional requirements may include:
- quorum requirements;
- voting procedures; and
- notice periods.
You must review your Articles of Association to ensure compliance with any specific provisions regarding AGMs.
Notice of the AGM
Proper notice is a critical requirement for an AGM. The Companies Act 2006 mandates specific guidelines on the issuance of notice, which include some of the following points:
Timing
Content
The notice must include:
- date, time, and location of the meeting;
- the agenda, including all likely resolutions;
- information on how shareholders can appoint proxies; and
- explanatory notes for any special business.
Delivery
You must provide notice to all shareholders, directors and the company’s auditors.
You can deliver notices electronically if shareholders have consented to receive communications in this manner.
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Agenda and Resolutions
The AGM agenda typically includes both ordinary and special resolutions.
Ordinary Resolutions
A simple majority (more than 50%) passes ordinary resolutions.
Common ordinary resolutions include:
- approval of the annual report and accounts;
- declaration of dividends;
- re-election of directors; and
- appointment and remuneration of auditors.
Special Resolutions
A supermajority of at least 75% passes special resolutions. You typically use these for significant decisions, such as:
- amendments to the Articles of Association;
- authorising the issuance of new shares; and
- approving substantial property transactions.
Shareholder Proposals
Shareholders holding at least 5% of the total voting rights, or at least 100 shareholders holding shares on which an average sum of not less than £100 per shareholder has been paid up, can propose resolutions for discussion at the AGM. They must put forward such proposals at least six weeks before the AGM.
Quorum
A quorum is the minimum number of members you need present for the AGM to be valid. Your Articles of Association usually outline specific quorum requirements.
In the absence of specific provisions, the default requirements are:
- public companies must have two members present in person or by proxy; and
- private companies must have one member present in person or by proxy.
Company Registers
When you incorporate a company in England and Wales, you must maintain a number of company registers at its registered office or at the Companies House. This template includes these company registers.
Conducting the AGM
Chairperson
The chairperson of the AGM is typically your company’s chairperson of the board. If they are unavailable, your Articles of Association may outline an alternative procedure for appointing a chairperson for the meeting.
Minutes
You must record accurate minutes to provide an official record of the proceedings. These minutes should include:
- details of the resolutions passed;
- results of voting; and
- discussions held.
The chairperson must sign the minutes. Also, you should keep them for at least ten years.
Voting
You can conduct voting by either a show of hands or a poll.
Shareholders who cannot attend the AGM can appoint a proxy to vote on their behalf. Individuals can nominate a proxy for a single meeting or indefinitely. Your notice of the AGM must include instructions on how to appoint a proxy.
Post-Meeting Reporting
Following the AGM, you must:
- file resolutions passed at the AGM with Companies House, particularly special resolutions and any changes to the Articles of Association;
- update your company’s register of members to reflect any changes; and
- communicate the outcomes of the AGM to shareholders.
This guide will help you to understand your corporate governance responsibilities as a director, including the decision-making processes
Key Takeaways
The Annual General Meeting is a cornerstone of corporate governance in the UK, providing a platform for shareholders to exercise their rights and for the company to demonstrate accountability.
Compliance with the legal requirements outlined in the Companies Act 2006 and your Articles of Association is essential. By following best practices and ensuring clear communication and engagement, you can make your AGMs effective and valuable for all stakeholders involved.
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Frequently Asked Questions
A public company should call an AGM each year within six months of the day following its accounting reference date. Conversely, a private company may have provisions in its Articles of Association requiring an AGM, but if not, it can call one voluntarily.
An AGM requires 14 clear days’ notice for a non-traded company. However, traded companies require 21 clear days’ notice, although public companies subject to the UK Corporate Governance Code must provide 20 working days’ notice.
Yes. Shareholders can appoint a proxy to vote on their behalf if they cannot attend in person. Your AGM notice must include proxy appointment instructions.
At least 75% of voting shareholders must approve a special resolution.
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