Summary
- UK companies must hold AGMs in compliance with the Companies Act 2006, with public companies required to give at least 21 clear days’ notice and private companies at least 13 clear days’ notice.
- AGM resolutions are either ordinary (simple majority) or special (75% supermajority), and post-meeting obligations include filing resolutions with Companies House and updating the register of members.
- Companies must also review their Articles of Association, as these may impose additional requirements around quorum, voting procedures, and notice periods.
- This article is a plain-English guide to AGM legal requirements for UK business owners and company directors operating under the Companies Act 2006.
- It is produced by LegalVision, a commercial law firm that specialises in advising clients on corporate governance and compliance obligations.
Tips for Businesses
Review your Articles of Association before each AGM – they may impose stricter requirements than the Companies Act 2006 defaults. Issue notices on time, confirm quorum requirements, and ensure minutes are signed and retained for at least ten years. File any special resolutions with Companies House promptly after the meeting.
An Annual General Meeting (AGM) gives shareholders a formal opportunity to hold a company’s leadership to account. UK law sets clear rules for 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 primary legislation governing AGMs in the UK is the Companies Act 2006. This Act outlines companies’ obligations regarding the holding, conducting, and reporting of AGMs.
Additionally, the Articles of Association of a company may impose further requirements. These additional requirements may include:
- quorum requirements;
- voting procedures; and
- notice periods.
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
Public companies must give at least 21 clear days’ notice, while private companies must give at least 13 clear days’ notice unless the Articles of Association specify a longer period.
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
The company must provide notice to all shareholders, directors and the company’s auditors.
Notices can be delivered electronically if shareholders have consented to receive communications in this matter.
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Agenda and Resolutions
The AGM agenda typically includes both ordinary and special resolutions.
Ordinary Resolutions
Ordinary resolutions require a simple majority (more than 50%).
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
Special resolutions require a supermajority (of at least 75%) to pass. These are typically used 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 required to be present for the AGM to be valid. The 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.
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 the company’s chairperson of the board. If they are unavailable, the Articles of Association may outline an alternative procedure for appointing a chairperson for the meeting.
Minutes
The company 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.
Voting
Voting can be conducted 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. The notice of the AGM must include instructions on how to appoint a proxy.
Post-Meeting Reporting
Following the AGM, companies must:
- file resolutions passed at the AGM with Companies House, particularly special resolutions and any changes to the Articles of Association;
- update the company’s register of members to reflect any changes; and
- communicate the outcomes of the AGM to shareholders.
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 the company’s Articles of Association is essential. By following best practices and ensuring clear communication and engagement, companies can make their 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. A private company may have provisions in its Articles of Association requiring an AGM but, if not, can call one voluntarily.
An AGM requires 14 clear days’ notice for a non-traded company. Traded companies require 21 clear days’ notice, although public companies subject to the UK Corporate Governance Code must provide 20 working days’ notice.
No. If the quorum isn’t met, the AGM cannot proceed. The chairperson must adjourn the meeting until the minimum attendance requirement is satisfied.
The directors or shareholders present can elect an alternative chairperson, following the procedure outlined in the company’s Articles of Association.
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