Circumstances under which an AGM is not required
Annual General Meeting
Section 610 provides that (1) subject to subsections (2) and (3), a company must, in respect of each financial year of the company, hold a general meeting as its annual general meeting within the following period (in addition to any other meetings held during the period)—
| (a) in the case of a private company or a company limited by guarantee, |
9 months after the end of its accounting reference period by reference to which the financial year is to be determined; and |
| (b) in the case of any other company, |
6 months after the end of its accounting reference period by reference to which the financial year is to be determined. |
(2) If the accounting reference period mentioned in subsection (1) is the first accounting reference period of the company and is longer than 12 months, the company must hold a general meeting as its annual general meeting within the following period—
|
(a)in the case of a private company or a company limited by guarantee, |
(i) 9 months after the anniversary of the company’s incorporation; or |
| (b) in the case of any other company, |
(i) 6 months after the anniversary of the company's incorporation; or (ii) 3 months after the end of that accounting reference period, whichever is the later. |
(3) If a company has by a directors' resolution under section 371 or a notice delivered to the Registrar under that section, shortened an accounting reference period, the company must hold a general meeting as its annual general meeting within the following period—
| (a) in the case of a private company or a company limited by guarantee, |
(i) 9 months after the end of the shortened accounting reference period; or (ii) 3 months after the date of the directors’ resolution, whichever is the later; and |
|
(b) in the case of any other company, |
(i) 6 months after the end of the shortened accounting reference period; or whichever is the later. |
(4) A private company mentioned in subsections (1), (2) and (3) does not include a private company that is, at any time during the financial year, a subsidiary of a public company.
Non-compliance
If a company contravenes subsection (1), (2), or (3) as mentioned above, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5.
As per Criminal Procedure Ordinance, a fine at level 5 amounts to HK$50,000.
Notice required of general meetings (Sections 571 and 578)
(1) A company is required to give at least 21 days' notice for the annual general meeting. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given.
|
|
Type of general meetings and matters |
Notice period |
|
1. |
Annual general meeting |
21 days |
|
2. |
General meeting |
14 days |
|
3. |
Resolutions requiring special notice |
28 days (S578) |
(2) If the company’s articles require a longer period of notice than that specified in subsection (1), a general meeting of a company (other than an adjourned meeting) must be called by notice of that longer period.
(3) A general meeting of a company is to be regarded, despite the fact that it is called by shorter notice than that specified in subsection (1) or in the company’s articles, as having been duly called if it is so agreed—
(a) in the case of an annual general meeting, by all the members entitled to attend and vote at the meeting; and
(b) in any other case, by a majority in number of the members having the right to attend and vote at the meeting, being a majority together representing at least 95% of the total voting rights at the meeting of all the members.
Notice to the auditor
Section 575 of the Companies Ordinance provides that, if the Company is required to give the notice of a general meeting or documents relating to the general meeting to the members, it must give the same to the auditor. If that notice requirement is not followed, the company and each responsible person commits an offence, and each is liable to a fine at level 3 (HK$10,000).
Contents of Notice of General Meetings (Section 576)
(1) A company must ensure that the notice
(a) specifies the date and time of the meeting;
(b) specifies the place of the meeting;
(c) states the general nature of the business to be dealt with at the meeting;
(d) in the case of a notice calling an annual general meeting, states that the meeting is an annual general meeting; and
(e) if a resolution is intended to be moved at the meeting—
(i) includes notice of the resolution; and
(ii) (where the company is not a wholly owned subsidiary) includes a statement containing the information and explanation, if any, that is reasonably necessary to indicate the purpose of the resolution.
(2) Subsection (1)(a), (b) and (c) has effect subject to any provision of the company's articles of association.
(3) Subsection (1)(e) does not apply in relation to a resolution of which—
(a) notice has been included in the notice of meeting under section 567(3) or 568(2); or
(b) notice has been given under section 615.
Non-compliance
(4) If a company contravenes (1)(e), the company, and every responsible person commit an offence, and each is liable to a fine at level 3 (HK$10,000).
Exemption from Holding the Annual General Meeting
Section 611 provides that
(1) Section 610 does not apply to a company that is a dormant company, as defined under section 5(1).
(2) If such a company enters into an accounting transaction, the exemption ceases to have effect on and after the date of the accounting transaction.
Circumstances in which a company is not required to hold an annual general meeting
Section 612 provides for the circumstances in which the company is not required to hold an annual general meeting.
(1) A company is not required to hold an annual general meeting if—
(a) everything that is required or intended to be done at the meeting (by resolution or otherwise) is done by a written resolution; and
(b) a copy of each document (i.e. the financial statement) that under this Ordinance would otherwise be required to be laid before the company at the meeting, is provided to each member, on or before the circulation date of the written resolution.
(2) A company is also not required to hold an annual general meeting if—
(a) the company has only one member; or
(b) all of the following are satisfied—
(i) the company has, with a resolution passed by all members, dispensed with the holding of the annual general meeting;
(ii) the company has not revoked the resolution, or the company has revoked the resolution but is not required to hold an annual general meeting (because the resolution ceases to have effect 9 months after the end of a financial year); and
(iii) no member of the company has required the holding of the annual general meeting.
[Comment: It is noted that sub-section 2 is a new provision in comparison with the predecessor ordinance.]
Illustrated Examples
A company is incorporated on 10th May 2018. Pursuant to Section 369(5), the directors determined that the date for the first set of financial statements should end on 31st October 2018. The Company completed the audit for the first set of financial statements.
Question 1: When is the date for the first annual general meeting?
Answer 1 (See texts in yellow and texts in bold)
Section 610 provides for the requirement to hold an annual general meeting as below:
(1) Subject to subsections (2) and (3), a company must, in respect of each financial year of the company, hold a general meeting as its annual general meeting within the following period (in addition to any other meetings held during the period)—
(a) in the case of a private company or a company limited by guarantee, 9 months after the end of its accounting reference period by reference to which the financial year is to be determined; and
(b) in the case of any other company, 6 months after the end of its accounting reference period by reference to which the financial year is to be determined.
(2) If the accounting reference period mentioned in subsection (1) is the first accounting reference period of the company and is longer than 12 months, the company must hold a general meeting as its annual general meeting within the following period—
(a) in the case of a private company or a company limited by guarantee—
(i) 9 months after the first anniversary of the company's incorporation; or
(ii) 3 months after the end of that accounting reference period,
whichever is the later; and
(b) in the case of any other company—
(i) 6 months after the first anniversary of the company's incorporation; or
(ii) 3 months after the end of that accounting reference period,
whichever is the later. (Amended 35 of 2018 s. 63)
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Section 368 provides for the definition of "accounting reference period" as below:
(1) Subject to subsection (1A), for an existing company formed and registered before the commencement date [# 2014-03-03] of Division 1 of Part 3, the first accounting reference period begins on the date immediately following its primary accounting reference date and ends on the first anniversary of its primary accounting reference date.
(1A) For an existing company that was a dormant company at the beginning of the commencement date [#2014-03-03] of Division 1 of Part 3 but has ceased to be a dormant company—
(a) subsection (1) does not apply; and
(b) the first accounting reference period begins on the date the company ceased to be a dormant company and ends on its primary accounting reference date. (Added 35 of 2018 s. 40)
(2) For—
(a) a company formed and registered under this Ordinance; and
(b) a company formed and registered under a provision of the predecessor Ordinance having a continuing effect under Schedule 11 or by virtue of section 23 of the Interpretation and General Clauses Ordinance (Cap. 1),
the first accounting reference period begins on the date of its incorporation and ends on its primary accounting reference date. {[Answer: the first accounting reference period is the period from 2018-05-10 to 2018-10-31, with 2018-05-10 being the primary accounting reference date]}
(3) Every subsequent accounting reference period of a company is the period of 12 months beginning immediately after the end of the previous accounting reference period and ending on its accounting reference date, unless the accounting reference period is shortened or extended, as stated in a directors' resolution under section 371(3).
Question 2: what is the date for the first annual general meeting (the AGM) if the incorporation date is on 1st Aug 2018 and the directors determine that the first set of financial statements should end on 31st December 2019?
Answer 2
If the company closes its books on 31st December 2019, it covers a period of longer than 12 months (but less than 18 months from the incorporation date). In that case, section 610(2)(a)(i) or (ii) shall apply.
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