Companies Ordinance 2016: SECP simplifies procedure for convening AGMs

The Securities and Exchange Commission of Pakistan (SECP) has simplified the procedure for convening Annual General Meetings (AGMs) by the companies. Sources said on Saturday that the procedure has been simplified under the newly promulgated Companies Ordinance 2016. The new features of the AGMs under the Ordinance 2016 revealed that the restriction on granting extension in first AGM has been abolished.
The AGM can now be held nearest to the city in which the registered office is situated to facilitate the members of a company whose registered office with the factory is situated in remote areas. It will be mandatory requirement for listed company to arrange video-link facility for attending meeting by the members residing in other cities, not being less than ten percent, if they request so. The requirement of publication of notice in the newspaper has been simplified.
The single member company (SMC) has been exempted from holding the AGMs, they added. The new provision (132) relating to the annual general meeting under new Companies Ordinance said: (1) Every company, shall hold, an annual general meeting within sixteen months from the date of its incorporation and thereafter once in every calendar year within a period of four months following the close of its financial year:
Provided that, in the case of a listed company, the Commission, and, in any other case, the registrar, may for any special reason extend the time within which any annual general meeting, shall be held by a period not exceeding thirty days.
(2) An annual general meeting shall, in the case of a listed company, be held in the town in which the registered office of the company is situated or in a nearest city:
Provided that in case of listed companies if the members holding ten percent of the total paid up capital or such other percentage of the paid up capital as may be specified, are residents of any other city, the company shall provide the facility of video-link to such members for attending annual general meeting of the company, if so required by such members in writing to the company at least seven days before the date of the meeting.
(3) The notice of an annual general meeting shall be sent to the members and every person who is entitled to receive notice of general meetings at least twenty-one days before the date fixed for the meeting: Provided that in the case of a listed company, such notice, in addition to its being dispatched in the normal course, shall also be published in English and Urdu languages at least in one issue each of a daily newspaper of respective language having nationwide circulation.
(4) Nothing in this section shall apply to a single member company.
(5) Any contravention or default in complying with the requirements of this section shall be an offence liable, a) if the default relates to a listed company, to a penalty of level 2 on the standard scale; and (b) if the default relates to any other company, to a penalty of level 1 on the standard scale, it added.