Welcome to Query Of The Week
Welcome to this week’s Query Of The Week. Each week our technical team respond to a huge number of client queries and in this segment, we share with you the most common questions that keep coming up time and time again.
In this week’s Query Of The Week, John Murphy discusses 3 common questions about AGM’s.
If this Query Of The Week was of interest to you, you will also be interested in our Directors & Members Meetings, Proceedings and Register Maintenance (Company Law Bootcamp 2) online CPD course.
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|Online Course Duration||1 Hour|
|Presenter||John Murphy – OmniPro|
Query Of The Week – Video Transcript
(Please note that this is a direct unedited transcript of the spoken word as recorded on the video)
3 Common Queries about AGM’s
This week we received a number of queries in relation to AGMs, so John Murphy had a look at three common questions in relation to holding AGMs
1. What happens if nop one shows up to your AGM?
The first element of the question is what happens if you call your AGM, and no one turns up?
Section 175 of the Companies Act 2014 deals with requirements for AGMs. It requires one to be held at least once a year and within 15 months of the last AGM. That’s the requirements of the Act.
In this particular case, once you have given your required 21 clear days notice before the day of the AGM, the day came for the AGM and nobody turned up, or only a certain amount of people turned up.
Effectively company law says that in order to hold an annual general meeting there must be a quorum of two, under Section 182 of the Companies Act 2014, unless the constitution says otherwise.
If In this case, the quorum didn’t turn up what can you do?
Section 182 of the Companies Act 2014 says, that you wait 15 minutes, if the quorum isn’t present, whether that be two or something else that’s in the constitution, well, then you adjourn the meeting, you say, look, at that point in time, we’re going to deem the meeting closed.
You then reconvene a meeting, a week later, in the same location, and at that point in time, whoever turns up, after 30 minutes, even if the quorum isn’t present, is deemed to present. So at that point in time, the meeting can start with whoever is there and they can go through the normal process that you will go through in an AGM.
2. What Happens if the accounts aren’t ready for the AGM?
Section 341 states that there is a requirement to lay financial statements before the AGM within 9 months of the year-end. What should you do if the accounts are no ready for the AGM?
December year-end accounts technically should be presented by 30th September of the following year. Even if the accounts aren’t ready, you still have to go through the 21 clear days notice. So by the 3rd September give the notice to the members, convene the meeting, go through what would otherwise be gone through, approving dividends, the reappointment of auditors, but explain that the accounts aren’t available for issue and, as a result, you’ll have to reconvene the meeting in the future and then they’ll accordingly get their 21 days notice at that point in time in the future.
3. What if we don’t have an AGM within the required time?
What if we haven’t had an AGM within the 15 months that we are required to have it, under Section 175? What are the implications?
Section 175 of the Companies Act 2014 is clear, it says if you don’t hold an AGM within the 15 months of the last AGM, well then you’re deemed to have committed a category three offense which effectively is up to €5000 fine and/or six months imprisonment.
In order to try and rectify this, you would then try and hold an AGM, even though it’s after 15 months. At that AGM you would explain that this is the AGM for the previous period and if everyone agrees that this is deemed to be the AGM. From there then you can go through with your normal AGM process.
That said, it doesn’t necessarily prevent you from being liable to a category three offense.
If you don’t go through the process even after 15 months, and you don’t do anything, well then you’re onto a category four offense for not holding a meeting or trying to convene a meeting after 15 months.