AGMs Made Easy: Compliance and Best Practices under CAMA 2020
Annual General Meetings (AGMs) are essential for maintaining transparency, compliance, and shareholder engagement in Nigerian companies. Under the Companies and Allied Matters Act (CAMA) 2020, companies must hold an AGM annually, with no more than 15 months between two AGMs. Newly incorporated companies have a grace period, holding their first AGM within 18 months of incorporation without needing another in the same year.
Rescheduling and Consequences of Missing the Deadline
If an AGM needs rescheduling, shareholders must be notified, and the new date should be within 15 months from the last AGM. Extensions beyond this period require approval from the Corporate Affairs Commission (CAC). Failing to hold an AGM on time can lead to the CAC intervening to call a meeting. Non-compliance may result in fines and sanctions for the company and its officers.
Calling the AGM and Notice Requirements
The Board of Directors is primarily responsible for calling the AGM. If they fail, shareholders can requisition the meeting. Notices must be given 21 days in advance, or shorter if all shareholders consent. Notices should be sent to directors, shareholders, external auditors, and the company secretary. They can be sent by email, and a waiver of statutory notice must be prepared if the 21-day period is shortened.
Conducting the AGM
AGMs can be held in person or via written resolutions. Essential documents include notices, proxy forms, company accounts, and a procedure guide for the Chairman. The quorum for an AGM is generally one-third of the total number of members or 25 members, whichever is less. Proxy forms must be submitted at least 48 hours before the meeting, allowing shareholders to appoint proxies to represent them.
Typical Agenda Items
Common agenda items at an AGM include declaring dividends, presenting financial statements, electing directors, fixing auditor remuneration, and appointing audit committee members. Any special business, such as corporate changes or major financial decisions, must be clearly detailed in the notice.
Financial Reporting
Directors must prepare audited financial statements and present them at the AGM. Companies must appoint auditors annually to verify these statements. Post-meeting, the minutes of the AGM must be meticulously recorded and stored at the company’s registered office. These minutes should be accessible to shareholders during business hours.
Filing with the Corporate Affairs Commission
The financial statements, as part of the annual returns, must be filed with the CAC within 42 days from the date of the AGM. Filings are conducted online through the CAC’s portal. Signed, scanned copies of the financial statements and any related resolutions are acceptable for filing. Upon approval, the CAC issues an acknowledgment letter confirming the filing of annual returns and a status report confirming the completion of other changes.
By following these guidelines, companies in Nigeria can conduct AGMs effectively, ensuring compliance and fostering strong corporate governance. Embrace these strategies to navigate your AGM processes smoothly and efficiently.
Conclusion
By adhering to these comprehensive guidelines, companies in Nigeria can ensure their Annual General Meetings (AGMs) are conducted effectively, fostering transparency, compliance, and robust shareholder engagement. Regular and well-organized AGMs not only fulfill legal requirements under the Companies and Allied Matters Act (CAMA) 2020 but also reinforce good corporate governance, strengthening trust and accountability within the company.
For insights into AGM practices in different jurisdictions and how they compare, read our article, “Mastering AGM in Algeria: The Ultimate Guide“. Embrace these strategies to navigate your AGM processes smoothly and efficiently, positioning your company for sustained success and growth.
