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ACCA Applied Skills · Corporate and Business Law (Global) · Company meetings and resolutions

Orchid Co has its annual general meeting (AGM) each year. A shareholder asks what business is normally dealt with at an AGM. Which of the following is the best description of a typical AGM?

The best description is a yearly meeting where accounts are presented, directors are re-elected and auditors are appointed or reappointed. This is the routine business of an AGM. Meetings about winding up or class rights are separate general or class meetings, not the standard annual meeting.

  1. AA meeting at which the company's accounts are laid before members, directors are re-elected and auditors are appointed or reappointedCorrect
  2. BA meeting held only when the company is in financial difficulty to decide whether it should be wound up
  3. CA meeting of one class of shareholders only to approve changes to the rights attached to their shares

Explanation

An AGM is the yearly general meeting of members, where routine business is dealt with: receiving the accounts, re-electing directors, and appointing auditors and fixing their remuneration. Winding-up decisions are not routine business, and meetings of one class of shareholders are class meetings, not AGMs.

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