Introduction to this document

Notice of AGM for private limited company

Private limited companies don’t have to hold an AGM unless the company’s articles insist on one taking place. However, there’s nothing to stop a company from holding one if it wishes.

Advantages

One of the main purposes of the AGM is for the members to hold the directors to account for their performance during the year (and to vote for their replacements if necessary). It is the responsibility of the directors to call the AGM, which they can do without giving the statutory notice period of 14 days’ written notice (unless the company’s articles say otherwise) provided they have the consent of all members.

Advice

The directors may call an AGM (on the same day if they wish) provided they obtain the written consent of all the members who have the right to attend and to vote.

Tip

The directors can call the meeting at any time or any place for the convenience of the members (i.e. whenever they are together in the same place). Meetings do not have to be in a building. They can be in a car or a pub. In fact, any place where the members can be accommodated.

Documents?

Similarly, the members can consent to short notice for the acceptance of documents. The Companies Act provides that members are entitled to 14 days (unless the company’s articles say otherwise) to examine AGM documents such as accounts and directors’ reports.

Tip

Although private companies are not obliged by the Companies Act 2006 to hold AGMs, it’s important to check your articles to see if it’s still necessary and, if so, what length of notice has to be given to shareholders.

Meetings during the pandemic

Holding in-person meetings during the coronavirus pandemic has been difficult either because of national or local restrictions or because doing so would put participants at risk. Many companies can successfully hold meetings online. However, some cannot do so under their constitutions or for practical reasons such as shareholder numbers, access to the necessary technology, or willingness to meet remotely.

If a private company has to hold a meeting during the pandemic because it is obliged to do so under its articles or it needs to comply with a statutory procedure, it is allowed to use a “closed meeting” model under the Corporate Insolvency and Governance Act 2020. This enables companies that must hold meetings between 26 March 2020 and 30 March 2021 to collect votes cast electronically without shareholders attending. Shareholders do not have a right to attend the meeting or participate in any way other than voting. This effectively converts the requirement to hold a meeting into a written resolution, still giving shareholders the right to participate in the decision, without having to meet in person and without the company having to manage discussions remotely. These temporary measures override any provisions in the company’s articles that deal with shareholder meetings and apply to any type of meeting. The Notice of AGM for Private Limited Company has been amended to include this method of holding meetings. Companies should attach the text of the resolutions to be considered.