- 15 Marks
Question
Yaw Perbi, the CEO of your company, is preparing for a top management meeting scheduled for 1 December 2023. One of the issues to be discussed is the mode of holding the next shareholders’ meeting. There are views that the Annual General Meeting (AGM) must be in-person so that members can vote on resolutions to be passed. Others believe that the AGM should be virtual or hybrid. Some shareholders believe that the items on the agenda are too many and that they would need two days to have a meaningful discussion. Kwasi Mensa, a shareholder, has decided not to attend the AGM if it is organised virtually.
Required:
a) Explain the following to your boss:
i) The requirement of the Companies Act, 2019 (Act 992) on the interval between which AGMs are to be held.
ii) THREE things that should be covered in the notice for an AGM.
iii) TWO consequences of not holding an AGM in accordance with the Companies Act.
iv) Justify whether or not decisions taken at the AGM will be binding on Kwasi Mensa.
Answer
i) Requirement on AGM Interval:
- The first AGM must be held within 18 months of incorporation.
- After the first AGM, not more than 15 months shall elapse between two AGMs.
- This ensures accountability and shareholder engagement in corporate affairs.
ii) Three Things That Should Be Covered in an AGM Notice:
- The notice must be in writing and given to all entitled persons.
- It must specify the date, time, and venue of the meeting.
- It must state the nature of the business to be transacted, including proposed resolutions.
iii) Two Consequences of Not Holding an AGM:
- The Registrar of Companies may intervene and direct that an AGM be called.
- Legal action can be initiated against the company and its officers for failing to comply with statutory obligations.
iv) Binding Nature of AGM Decisions on Kwasi Mensa:
- The Companies Act states that decisions made at a duly convened AGM are binding on all shareholders, regardless of attendance.
- Kwasi Mensa’s absence does not exempt him from the resolutions passed.
- Tags: AGM, Companies Act, Corporate Governance, Meeting Notice, Shareholder Rights
- Level: Level 1
- Topic: Company Meetings and Resolutions
- Series: Nov 2024
- Uploader: Salamat Hamid