Annual General Meetings - Are they required?
This is a very pertinent question, and surprisingly, not one that is too difficult to answer.
The Companies Act 2006 abolished the statutory requirement for private companies to hold Annual General Meetings (AGM). The Government's explanatory notes expressly say that private companies were no longer required by statute to hold an AGM. However, Parliament specifically preserved AGM requirements contained in the articles of existing private companies.The transitional provisions provide that the repeal of the old section 366 requirement does not alter a provision in a private company's articles which expressly requires the company to hold an Annual General Meeting.
What does that mean for Church Mews Management Company (Mitcham) Ltd?
The Memorandum and Articles of Association for Church Mews Management Company (Mitcham) Ltd (CMMCM Ltd),Incorporated on the 1st July 1988 states:
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"The Company shall hold a General meeting every year as its Annual General Meeting in addition to any other meeting in that year and shall specify that meeting as such in any notice calling it; and not more than fifteen months shall elapse between the date of one Annual General meeting of the Company and that of the Next. Provided that so long as the Company holds its first Annual General Meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at such a time and place as the directors shall appoint."
Memorandum of Articles of Association, Church Mews Management Company (Mitcham) Ltd. 1988, General Meetings, Paragraph 10 |
We can clearly see that the Articles state that CMMCM Ltd must hold an AGM every year, and not more than 15 months after the previous AGM was held. The Companies Act 2006 does not apply to CMMCM Ltd as it was incorporated in 1988 under the Companies Act 1985 under the regulations of Table A
Let us break this down a little to make it easier to understand.
The article states:
"The Company shall hold a General meeting every year as its Annual General Meeting..."
and then expressly requires:
"not more than fifteen months shall elapse between the date of one Annual General meeting and that of the Next."
It also states:
"The annual general meeting shall be held at such a time and place as the directors shall appoint."
This is a very clear obligation contained within our company's constitution. AGM's MUST BE HELD EVERY YEAR. This is clearly diametrically opposed to advice given to CMMCM Ltd for the past 15 years or so. Although Section 366 was repealed, the requirement to hold AGM's is firmly embedded in the Company's constitution through our Memorandum and Articles of Association.
There is an absolute need to get the Company back into following its LEGAL constitution.
Coming soon: Why Annual General Meetings are Important [to Church Mews Management Company (Mitcham) Ltd.]