Article 128 of the Companies Act prescribes that every company must hold the annual general meeting in addition to other meetings of that year. The annual general meeting must be held during a calendar year (not on the date of anniversary of the company). The first annual general meeting must be held by not later than eighteen (18) months from the date of incorporation of the company, and not more than fifteen (15) months should elapse for successive annual general meetings.
The annual general meeting is convened by the directors of the company (who delegate the obligation to circulate notices thereof to the company secretary). However, in default, it is possible for the shareholders of the company to convene such annual general meeting themselves. The business typically transacted in an annual general meeting includes the following:
declaration of dividends;
consideration of the annual accounts and the reports of the directors and auditor;
the election of directors;
the determination of remuneration payable to the auditors; etc
There are no limitation nor restrictions on the type of business which may be transacted at the annual general meeting, although it is undeniable that the main scope is the approval of the annual accounts and the election of directors. The circulation of annual returns is a task usually delegated to the company secretary and should be circulated to all persons entitled to receive notices of general meetings – i.e. the shareholders, the directors and the auditors. The Companies Act, through its model articles, prescribes a minimum notice period of fourteen (14) days, although it is possible to derogate from such notice period through specific amendments in the Memorandum and Articles of Association, or if so agreed by all the members entitled to attend the meeting who received late notice.
The directors hold office from one annual general meeting to another, and the convening of the annual general meeting allows shareholders to have a direct rendition of the performance of the company. The directors’ report and the auditors’ report shall be presented to the shareholders, in order to assess whether the company has attained its financial targets. The directors and the auditor shall answer the questions of the shareholders, who may then elect to re-appoint them or to remove them as directors and auditors of the company. If the directors are re-elected, there is no need to file a notification form to the Maltese Registrar of Companies – however, this shall be necessary is the company is not re-elected.
The shareholders may appoint proxies to represent their interest in the annual general meeting, and the proxy may not necessarily be other shareholders. The minutes of the annual general meeting should be kept by the company secretary and then held at the registered address of the company, unless provision to the contrary is included in the Memorandum and Articles of Association of the Company. The convening of annual general meeting is a mandatory requirement and any default thereof shall constitute a breach in terms of the Companies Act – with pecuniary penalties being inflicted on the company and its directors for every day in default.
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