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Understanding the Three Types of Shareholder Meetings Held in Singapore Companies
10/04/2023
When running a business in Singapore, holding shareholder meetings is an essential part of the process. These meetings allow shareholders to come together, discuss important matters concerning the company, and vote on key decisions that impact its future. However, not all shareholder meetings are created equal, and there are different types that companies must hold depending on their specific needs and circumstances.
In this blog post, we’ll look at the three types of shareholder meetings typically held in Singapore companies and explore what each entails.
What type of shareholder meetings exist in Singapore?
It is important to know that there are two types of annual meetings: director and shareholder meetings in Singapore. The Companies Act of Singapore and the Company Constitution set the basis for how a company conducts these meetings.
This article will focus on shareholder meetings in Singapore and help you determine the specific processes and formats for conducting the three types of shareholder meetings.
What are director meetings for a Singapore company?
A director’s meeting in Singapore is an annual meeting held by a company’s board of directors. During this meeting, the directors come together to discuss and make decisions on matters that affect the overall direction and management of the company. This can include financial performance, strategic planning, risk management, and other issues impacting the company’s operations.
Unlike shareholder meetings, which are designed to provide shareholders with a voice in the company’s decision-making process, director’s meetings are focused on ensuring that the company is operating in accordance with its objectives and goals.
The decisions made during director meetings can significantly impact the company’s future, making it important for directors to be well-informed and prepared for these meetings.
What are shareholder meetings in Singapore?
Shareholder meetings in Singapore are annual meetings held by a company’s shareholders to discuss important matters concerning the company and vote on key decisions that impact its future. These meetings allow shareholders to come together and voice their opinions on issues such as the election of directors, financial performance, and the distribution of profits.
There are 3 types of Shareholder meetings to consider in Singapore:
- The First Shareholder Meeting
- The Annual Shareholder Meeting (AGM)
- The Extraordinary Shareholder Meeting (EGM)
What is the first shareholder meeting?
In Singapore, public limited companies with shared capital must hold a statutory meeting, also known as a general meeting, which does not apply to private limited companies.
The first statutory meeting is mandatory and must be held within one to three months after the company is set up.
Before the meeting, the company directors must send a statutory report to all members and submit it to the Registrar at least seven days in advance.
The report, certified by two or more directors, should contain crucial information such as:
- the allocation of shares,
- issued cash shares,
- remaining balance and expense estimates, and
- any modifications in the contract.
Annual Shareholder Meetings (AGM) in Singapore
The annual general meeting (AGM) is an important meeting that must be held by every Singaporean company at the end of each financial year, within four months for public companies and six months for other types of companies.
The first AGM should occur within 18 months from the date of incorporation, and the period between two consecutive AGMs must be at most 15 months.
While public companies are mandated to hold an AGM, private companies can dispense with it, provided:
- they issue a resolution that states all members agree to dispense the meeting and;
- pass a written resolution approving all matters that would have been discussed at the AGM.
An AGM’s purpose is to discuss and decide on a company’s financial statements, which should offer a “true and fair” representation of its financial performance during the year. The approval and adoption of these statements are subject to the majority’s decision, with shareholders having the right to ask questions and seek clarification on the company’s financial health.
AGMs provide transparency and accountability to the company’s stakeholders, enabling them to make informed decisions and have a say in their operations.
Apart from discussing financial statements, AGMs serve as a platform for shareholders to approve other key business transactions that require their approval. Examples include:
- the declaration of dividends,
- changes in directorship,
- appointment of auditors, and
- approval of the company’s share structure.
The AGM meeting minutes should accurately capture all details about these discussions, including the decisions taken and any resolutions passed. This information is vital for ensuring transparency and accountability in the company’s operations and helps to maintain trust among stakeholders.
Extraordinary shareholder meetings (EGM) in Singapore
In Singapore, an Extraordinary General Meeting (EGM) can be called for any urgent matter that requires shareholder approval, regardless of the type of company. Unlike AGMs, EGMs can be held at any time and may address critical agendas not typically discussed in an AGM.
The directors of the company or at least two members holding 10% or more of the share capital, or not less than 5% of the members, can convene an EGM. This flexibility allows companies to respond swiftly to emerging issues and make important decisions that affect their operations without waiting for the next AGM.
What is the procedure for shareholder meetings in Singapore?
Companies in Singapore must follow specified guidelines for conducting a shareholder meeting. This procedure is as follows:
Providing notice for the meeting
The company secretary is responsible for drafting and sending the required notices of the meetings to all company members, shareholders, and officers. The notice must include the following:
- Date, time, and venue of the meeting,
- Business issues that will be discussed,
- Items that will be considered as ‘special resolution’,
- Members’ rights to appoint a proxy which will be attached as a proxy form,
- Unless the members who will attend the meeting have agreed to a shorter notice for its meetings, the timeline for sending the notice is as follows:
- If an ordinary resolution is to be passed at least 14 days before the meeting
- If a special resolution is to be passed, at least 21 days before the meeting
- If a special notice is required, at least 28 days before the meeting
Special notices
When shareholders intend to propose a resolution in the meeting, a special notice of the resolution should be issued to the company. Examples of resolutions that require special notice include:
- the removal of directors or,
- the removal of auditors before their term expires.
Electronic notices
The Companies Act of Singapore allows companies to send electronic notices.
What is the required quorum for a shareholder’s meeting in Singapore?
The minimum number of members required to attend a meeting to be considered valid is known as the quorum. In Singapore, the quorum is typically set at a minimum of 2 members present in person unless the Company Constitution specifies otherwise. It is important to note that a meeting can only commence once the quorum requirement is met.
Can proxies be used?
Members who cannot attend a company meeting may designate up to two proxies to attend and vote on their behalf. A proxy is not required to be a member of the company.
Shareholder resolutions for Singapore companies
As a way for shareholders to make decisions for a company, resolutions play an important role. It signifies the agreement of shareholders to a particular proposal.
In Singapore, the Companies Act requires a 75% majority decision for special resolutions and a 50% simple majority decision for ordinary resolutions unless the Company Constitution states otherwise. There are two types of resolutions:
Ordinary resolutions:
Ordinary resolutions can be used for deciding the day-to-day business matters and company decisions such as, but not restricted to:
- Dividend declaration
- Designation and compensation of auditors
- Retiring directors and election of their replacements
Special resolutions:
When an ordinary resolution is insufficient, the company must pass a special resolution, especially for major business decisions and significant company changes. Examples of matters that require a special resolution include, but are not limited to:
- Amending the Company Constitution
- Amending the company’s share capital
- Changing the company name
How can Belaws help?
If you have a question about shareholder meetings in Singapore, please speak directly with one of our experts.
You can also view our Singapore incorporation services here.
This article is for information purposes only and does not constitute legal advice.
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Frequently Asked Questions
What are the different types of shareholder meeting?
- The different types of shareholder meetings are the first shareholder meeting, annual shareholder meeting (AGM), and extraordinary shareholder meeting (EGM).
What are the three types of general meeting?
The three types of general meetings are the first shareholder meeting, AGM, and EGM.
What is a general meeting in Singapore?
A general meeting in Singapore is a meeting held by a company’s shareholders to discuss important matters concerning the company and vote on key decisions that impact its future.
What is the difference between AGM and EGM Singapore?
The main difference between AGM and EGM in Singapore is that AGMs are held at the end of each financial year and focus on financial statements and other key business transactions that require shareholder approval, while EGMs can be called for any urgent matter that requires shareholder approval at any time.
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