What is an annual general meeting and why is an AGM Notice Advertisement important?

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An annual general meeting, known more popularly in everyday parlance as well as in communications as an AGM, refers to the yearly meeting of the general membership of a business organisation. This ‘membership’ refers to the organisation’s board of directors, its chief officers as well as the various shareholders of the organisation.

It is at this meeting that the directors of the company present the company’s annual report and discuss how the company performed over the past year as well as the strategies that have been planned for the upcoming year. It is also during the annual general meetings that directors and shareholders get to actually meet each other face to face.

In India, the provisions of The Companies Act (2013) stipulate that all private limited companies, or limited companies must hold an annual general meeting every year in order to ensure that each and every stakeholder of the company are kept updated about the management and performance of the company, as well as its administrative practices and decisions which have been made or are to be made. 

Organisations publish an AGM notice advertisement in order to make the shareholders aware of when and where the annual general meeting of the company is to be held. This ad contains information such as the address of the registered office of the company, the date and time that the annual general meeting is scheduled to be held, as well as the agenda of the meeting or the points or issues that will be covered over the course of the meeting.

As is well known, the ownership of every company is on the basis of shares. In other words, shareholders, most of whom belong to the general public, hold stocks in a company. This stock represents a portion of the company’s share capital, which means the public have ownership of a fraction of the company. Therefore, the Act has made provisions such that all the company’s shareholders have a fair say in the proceedings and decision-making processes of the company. The annual general meeting is one such important provision. 

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