– 3 Things You Should Know About AGMs
Holding a company’s Annual General Meeting or AGM is one of the most important statutory requirements under the Companies Act. An AGM is a mandatory meeting of shareholders. There are three important things that directors who form a company should know about AGMs.
First, during the AGM, the company will present to the shareholders or members its financial statements, which may then raise queries with regards to their investment or other matters. Secondly, all members must receive notice of the AGM in writing. And thirdly, for the meeting to be considered legally valid, you will need a quorum, which is the minimum number of people required to be present during the meeting.
It is important for directors who start a company to hold its AGM on time. A delay or failure to do so, will incur a penalty which is imposed on the company or legal action which is taken against the directors of the company.
· Maintenance of Share Capital
Under the law a company is not allowed to use its share capital for any other purpose other than trading and conducting business. However, there are certain circumstances under which a company is permitted to alter or reduce its share capital, if this is allowed under its Articles. In such a case, the following alterations are permitted.
The company may consolidate and divide its share capital, convert paid-up shares into stock and vice versa, subdivide shares, cancel shares or unissued capital. Once these alterations have been completed, individuals who form a company should lodge a notice of alteration with the ACRA. Under section 71 of the Companies Act, a cancellation of shares is not regarded as a reduction in the company’s share capital. A company may also reduce its share capital with or without court sanction. This may involve cancelling or reducing liability on shares that have not been paid up, canceling paid up share capital or returning paid shared capital to members.
It is important to note that business owners who start a company are not allowed to return any of their assets to members with the exception of dividends which are to be paid out of profits. It is advisable to seek professional advice should you decide to alter or reduce your company’s share capital.
· When and How to File Your Annual Returns
Directors who form a company must ensure that they file their Annual Returns or AR. Filing of Annual Returns by companies is a requirement under law which must be complied with within one month of holding the company Annual General Meeting or AGM. A delay or failure to do so, will incur a penalty which is imposed on the company or legal action being taken against the directors of the company.
Even companies that dispense with holding their AGM are still required to file their AR within one month from the date that the resolutions were formally agreed to. This requirement also applies to dormant companies which are required to file their AR within one month of holding their AGM. Such an AR will only contain a declaration by the directors that the company has been dormant and under what circumstances. Exempt Private Companies are also required to file their AR within a month of their AGM.
· Why Employers Should Implement Work Life Harmony Strategies
With the present day competitive nature of businesses, it’s important for companies to take care of the well-being of their employees if they hope to prosper. Work Life Harmony strategies are implemented by employers to assist their employees in the management of work responsibilities, as well as their personal and family needs. A Work Life Harmony strategy encourages increased productivity and shareholder value, improved employee engagement, improved attraction and talent retention, improved customer experience, reduction in health-related costs such as medical leave and absenteeism, as well as promoting a workforce that is satisfied and more motivated.
· Outsourcing – Is This a Good Thing?
Today, a majority of banks and finance companies are turning to outsourcing some of their business functions overseas. This is due to a shortage of skilled workers and cost savings. There are various pros and cons to outsourcing functions overseas. The main advantage of outsourcing is that directors who form a company are able to keep costs down, as well as recruit staff to perform certain finance and accounting functions locally. One the other hand, the downside of outsourcing is that the company could end up with low quality services and products, as well as the loss of intellectual property. Before you turn to outsourcing, it is important for company directors to weigh the pros and cons of this venture.