Definition of an AGM
An Annual General Meeting (AGM) is a mandatory general meeting which is often held by the shareholders of a company. During an AGM, the directors of the company are required to carry out the responsibility of presenting the report about the company’s performance and strategies. Furthermore, during an AGM, all directors who have any voting rights bestowed upon them are tasked with the responsibility of voting on current issues. They are expected to select other members of the company’s board of directors, pay any outstanding executive compensations, pay all remaining dividends, select an auditor for the company, or complete any other executive tasks which are incomplete.
On a somewhat related note, some of the directors of Indonesian companies are not conventional directors, but nominee directors instead. Should your company be in need of a nominee director, we at Paul Hype Page & Co will be willing to assist you. We will select a person who we deem to be competent and fully qualified for this important position. You can be certain that the person we select on your behalf will perform all the necessary tasks of a nominee director to the fullest extent.
Differences Between an EGM and an AGM
AGMs are not to be confused with extraordinary general meetings (EGMs). EGMs only take place when there is an urgent need to resolve a problem which must be resolved before the due date of the AGM. Unlike an AGM which is called at a planned and scheduled time, an EGM is called when there is an urgent matter which has to be addressed as soon as possible.
An EGM will require the shareholders to resolve an urgent issue which has arisen within the company. In most instances, an EGM will deal with one of the following matters: the removal of one or more of the company’s directors from the position, a legal matter that requires the immediate action of shareholders, or any time-sensitive issue which must be settled before the next AGM is to be held.
Another difference between an AGM and EGM is that AGMs can only be held during office hours and on business days while EGMs are not bound by this restriction. AGMs can only be called by the board of directors, but an EGM can also be called through the request of shareholders or a tribunal.
How Indonesian Companies Conduct AGMs
When an Indonesian company conducts an AGM, it must first give ample time for the directors of the company to have a meeting before the AGM begins. This preliminary meeting will allows the company’s directors to discuss the future direction of the company. This will subsequently provide them with an ample amount of time for the solving of any problems within the company. It is during such meetings that the directors of the company begin the processing of deciding who should be selected as the newest members of the Indonesian company’s board of directors.
Shareholders who are unable to attend the AGM at the time when it is held are permitted to attend it by proxy. Shareholders who attend it by proxy may either do so online or via email. All shareholders who choose to do so must, of course, be certain to listen to the agenda and participate actively during the session. During the AGM, there will be time allocated for the shareholders to ask any question to the directors of the company. The shareholders who would like to raise any issue with the directors and management of the company may take advantage of the opportunity to ask questions to the directors.
Before an AGM in Indonesia may begin, the company must inform all shareholders who will attend the AGM about the date, time, and location of the AGM. Other important information expected to be mentioned include details about any new directors or shareholders.
Topics Which Must Be Discussed During an Indonesian Company’s AGM
Minutes of the Previous AGM
The previous AGM’s minutes must be presented and approved accordingly before the agenda of the AGM to be held may take effect.
The management of the company must present its annual financial statements for approval by the shareholders.
Ratification of Directors’ Actions
During an AGM of an Indonesian company, the shareholders of the company are expected to ratify and approve the decisions made by the board of directors over the previous year. Such actions usually include the payment of dividends. Furthermore, during the AGM, the shareholders are expected to select the newest members of the board of directors for the company’s future management and operations. AGMs usually serve as a period during which the executives and directors are expected to share their vision of the company’s future with the company’s shareholders.
Several other matters which are sometimes discussed during an AGM of an Indonesian company include the approval of the directors’ remuneration report and policies, the appointing of the companies’ auditors, and the analysis of the remunerations of the company’s directors and auditors. An AGM also provides a platform for the shareholder to grant authority to the directors for the allocation of new shares. It is during this time that the shareholders may choose to propose a general meeting other than an AGM; such a meeting would subsequently take place at a time and place of the shareholders’ choice.
While on the topic of auditing, it should be noted that all companies in Indonesia would benefit from a thorough and competent auditing job. If your company requires any auditing to be done, you can always contact us at Paul Hype Page & Co. Our auditing services are highly recommended by all who have had the experience of using them. The annual financial auditing services which we provide will ensure that your company will not become a victim of fraud while also enhancing the quality of business activities performed. The services provided will also ensure that your company is practicing proper corporate governance, thus improving its reputation in the eyes of the general public.
People in an Indonesian Company Who Are Allowed to Call an AGM
Members of the board of directors are granted the right to call an AGM in any Indonesian company. However, shareholders who have a certain percentage of voting rights might choose to request that an AGM be held. Regardless of who calls for the AGM to be held, ample notice must be provided to those who are to attend the AGM before it is held.
Information to Be Included in the AGM Notice
When an AGM notice is released, there is certain information which ought to be include for the knowledge of the shareholders. Among the information to be included are the date and time during which the AGM is to held. The place where the meeting will be held must be clearly indicated, as must the general nature of the meeting. The notice of the AGM may be sent to the shareholders either in the form of writing or electronically through an email or a website post.
It can thus be concluded that AGMs are important for key figures in any company in Indonesia to meet and discuss how the company should handle any future issues which may arise at any time. Through the discussions which take place at AGMs, these key figures in the company will be able to thoroughly discuss the company’s affairs as well as air all their dissatisfactions and concerns about the company’s performance if they have any. AGMs also represent an excellent opportunity to inspect the auditors and books of accounts to ensure the future financial stability of the company.
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Holding an Annual General Meeting (AGM) in Indonesia FAQ
Not every employee in a company must attend an AGM. The AGM should only be attended by the directors of the company even if they are not shareholders, all the shareholders who are part of the company, the managers of the company, and the executives of the company who are part of the AGM. Other employees are not part of the AGM and therefore should not be invited or given notice of attendance to an AGM. However, employees who are shareholders are also to attend an AGM.
It is usually not possible to cancel a previously scheduled AGM meeting. However, it might be possible for the Articles of Association of the company to allow for a postponement as per the company’s internal arrangements. However, if an AGM has been called and the reason for its calling has since ceased to exist, it can be held and adjourned shortly thereafter.
All companies in Indonesia are expected to hold an AGM within a stipulated time period. AGMs are the primary opportunity for the shareholders of the company to receive information about the company’s affairs as well as make further inquiries of the directors and management.