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Holding Annual General Meeting (“AGM”) in Hong Kong

An annual general meeting (“AGM”), as the name implies, is a statutory requirement where a company’s directors or shareholders will gather in this mandatory yearly meeting to discuss the company’s financial report, business performance or strategy. Just like many other jurisdictions, a Hong Kong company must hold the AGM on a yearly basis. The new Companies Ordinance (“CO”) has stipulated that a company must convene an AGM in Hong Kong (Holding AGM in Hong Kong) in respect of each financial year of the company, rather than in each calendar year. Under the new CO, the accounting reference period is used to determine the time interval by which the financial statements of a company is to be prepared.

Specifically speaking, a company’s AGM must be held within the following period:

• 9 months after its accounting reference period ends – this applies to a company limited by guarantee or a private company that is not a subsidiary of a public company.
• 6 months after its accounting reference period ends – this applies to any other company.

In the event that the company’s accounting reference period is the company’s first accounting reference period and it exceeds 12 months, the company’s AGM must be held within the following period:

• For company limited by guarantee or a private company that is not a subsidiary of a public company, the AGM must be held 9 months after its first anniversary or 3 months after accounting reference period ends (whichever is later).
• For any other company, the AGM must be held 6 months after the company’s first anniversary of the company’s incorporation; or 3 months after the accounting reference period ends (whichever is later).

As per the section 584 of the new CO, a company can have its general meeting at two or more places with the help of technology in communication – technology that allows members who are not physically present together at the same location to listen, speak and vote at the meeting (subject to any provision of its articles).

 

Exemptions From Holding Annual General Meeting (AGM)

The new CO has also stipulated the circumstances that exempt a company from holding AGM:

• According to section 612(1), a company is exempted from holding an AGM if all that has to be done at the AGM is completed by written resolution and copies of the documents required to be laid or produced at the meeting are circulated to each member of the company on or before the circulation date of the written resolution.
• As per Section 612(2)(a), a single member company does not require to hold an AGM.
• Under Section 613, a company could dispense with the holding of AGMs by a written resolution or a resolution at a general meeting that is passed by all members.
• As per Section 611, a dormant company is exempted from the requirement to hold AGMs.

 

Notice of Annual General Meeting (AGM)

A company must give at least a 21-day notice to its members (in any other case, the notice period for a limited company is at least 14 days while the notice period for an unlimited company is at least 7 days). The company’s articles of association may need a longer period of notice.

 

Proxies: the Rights and Obligations

A proxy refers to a person who attends an AGM and votes on behalf of a member of the company. All members (inclusive of members of a company limited by guarantee, who are only entitled to appoint proxies if provided for in the Articles under the current regime) have the statutory right to appoint a proxy.

The new CO has set out a set of new rules for the proxy appointment:

• As per section 596 (1), the right to appoint another person as a proxy applies to all companies.
• Section 596(2) stipulates that a company limited by guarantee may, by its articles, confine proxies to members of the company only.
• Section 596(3) allows the appointment of multiple proxies in the case of a company having a share capital.
• Section 598 sets out that a notice period has to be specified for an appointment of proxy where a poll is demanded.
• Section 599 allows that the appointment and termination of a proxy may be sent to the company via electronic means.
• Section 601 stipulates that an instrument of proxy issued by a company must be such as to allow the member to instruct the proxy to vote in favour of or against each resolution.
• As per section 608, a company’s articles may grant more extensive rights to its members or proxies.

 

Dispensation of AGM

A company is allowed dispense with the requirement for holding of AGM. The dispensation of AGM can be passed either via a written resolution or a resolution at a general meeting by all members. A Hong Kong company does not need to hold any AGM for the financial year to which the resolution relates after passing such resolution. However, the company has to circulate all documents that are required to be laid before an AGM (e.g. financial statements, directors’ reports and auditor’s reports) to the members.