As the owner of said Company, shareholders have the right to know on the development of the Company growth. To conduct shareholder meetings are important for members to debate and use their rights to vote on matters that have direct impact towards the Company.
As mentioned above, a shareholder is a person who owns at least 1 share within a Company; be it a public limited Company or private limited Company. Their main function is basically to invest their wealth into a Company for it to attain its purpose.
Once the Company starts generating profit, then the shareholders have the right to receive dividends; a form of return of the investment they initially made. It is a norm for shareholders to not directly be involved with the management of the Company, hence appointment of a team of managers or board of directors are crucial to act on their behalf.
Even though shareholders will not be attending every meeting conducted by the Company, they are however expected to attend the Annual General Meeting (AGM) or Extraordinary General Meeting (EGM).
During these meetings, the board of directors are expected to update the yearly event occur to the shareholders. Members will then discuss, debate, and use their rights to vote before a conclusion is made.
It is only logical for the Companies Act 2016 to defend the rights and privileges for the owner of the Company.
According to Section 71(1) Companies Act 2016, the shareholders:
Have the right to attend, participate and speak at a meeting
Have the right to vote on a show of hands on any resolution of the company
Have the right to one vote for each share on a poll on any resolution of the company
Have the right to an equal share in the distribution of the surplus assets of the company
Have the right to an equal share in dividends authorized by the Board.
According to Section 293(1)(b) Companies Act 2016, the shareholders:
To conduct a shareholder meeting is a requirement all Malaysian registered Companies must abide to. This is to smoothen the process to decide on matters that will have direct impact to the Company. In general, there are three (3) types of shareholder meetings:
1. Annual General Meeting (AGM)
2. Extraordinary General Meeting (EGM)
3. Class meetings
Annual General Meeting (AGM)
According to Companies Act 2016, Annual General Meeting (AGM) is not compulsory for a private limited Company to hold. This is due to the fact that Companies Act 2016 has given the access for a Company to be owned by sole director and shareholder, hence, there is not a need for such meeting to be held.
However, for Companies who are owned by different individuals or corporate, it is a norm for them to still abide to their constitution and hold the AGM annually. The AGM is normally conducted for board of directors to inform the well-being of the Company and for shareholders to discuss the Company related affairs.
Extraordinary General Meeting (EGM)
An Extraordinary General Meeting (EGM) is normally conducted to discuss urgent matters that requires a conclusive answer within a short period of time. Such a meeting is normally conducted to discuss matter such as legal matter as well as removal of members or directors within a Company.
In short, EGM is similar to AGM but it can be conducted in anytime of the year while an AGM is only conducted once, which is normally after the Company financial year ended.
A class meeting is different compared to AGM and EGM. Such a meeting is held only for holders of different classes of shares within a Company is able to attend and vote.
Classes of shares in Malaysia are categorised as two:
This meeting is commonly held if:
Ordinary and Special Resolutions Prepared
Before a meeting – normally AGM is held, the board of director will need to decide to circulate an ordinary or special resolution.
According to Section 291(2) and 291 (3) of Companies Act 2016, an ordinary resolution:
Passed at a meeting on show of hands by simple majority if it is passed by members representing the majority of members who attended the meeting
Passed on a poll taken at a meeting if passed by members representing more than 50% of total voting rights of members who are entitled to vote or vote by proxy
According to Section 292(3) and 292(4), special resolution:
Passed at a meeting on show of hands if less than 75% of members present at a meeting
Passed on a poll taken at a meeting if passed by members representing less than 75% of total voting rights of members who are entitled to vote or vote by proxy
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