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CFA Level I · CFA Level I Exam · Equity Jurisdictions, Classes, and the Voting Process

At an annual general meeting, shareholders are asked to approve the appointment of the external auditor and to elect directors. Compared with an extraordinary general meeting, an annual general meeting is most likely:

An annual general meeting is held at regular yearly intervals to handle routine business such as electing directors, appointing the auditor and approving the accounts. Extraordinary meetings, by contrast, are called for specific non-routine matters like a merger, and AGMs are not limited to preference shareholders.

  1. Aheld at regular yearly intervals to deal with routine mattersCorrect
  2. Bcalled only when a merger needs shareholder approval
  3. Crestricted to shareholders who hold preference shares

Explanation

An AGM is a regular, usually yearly, meeting that deals with routine matters such as electing directors, appointing auditors and approving financial statements. An extraordinary meeting is called for specific urgent matters, so option B describes the wrong type. Option C is wrong because AGMs are open to holders of voting shares generally.

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