Incorporation is only the beginning of the process, corporations in truth require continuous attention. One important order of business a corporation is required to conduct is an Annual General Meeting or an “AGM”. A corporations governing legislation will set out the time frame within which an AGM is required to be held. According to both the Canada Business Corporations Act and the Nova Scotia Companies Act, an AGM is mandated to take place at minimum once a year.
Why are Annual General Meetings Required for Nova Scotia Corporations?
AGMs ensure that a company is in compliance with all the laws and regulations it is required to meet. The meeting acts as an annual reminder to be punctual with filing information, such as the financial statements. The purpose of filing is to allow the information to be available to the public. Doing so allows investors, consumers, financial institutions and others alike make informed decisions about the corporation.
What is Required at a Nova Scotia Company’s Annual General Meeting?
When preparing for an AGM, notice of the meeting must be sent out to all shareholders. The notice would include details of where and when the meeting is taking place.
There are certain matters that must be discussed at an AGM. These are stipulated in the corporations governing legislation. Some of the most common items include the following:
1. Financial Statements, if they exist, they must be presented by the directors at the meeting;
2. An auditor must be appointed, or waived by the shareholders. A waiver must be unanimous;
The following items are not required but it tend to be general practice to discuss them at the AGM:
3. Directors are typically elected by the shareholders at the AGM;
4. Reports are provided by the directors to the shareholders of the company at the AGM;
5. The AGM is an opportunity for all other ordinary business to be executed.
Simply put, an AGM is a meeting where all business of the company is managed. At this meeting, the shareholders will vote, minutes are taken to record those votes and then you do it all again the next year.
For smaller corporations, hosting a formal AGM is sometimes unnecessary. In those cases, a written resolution is prepared instead. The written resolution acts as a record of the decisions made and is signed by all the shareholders entitled to vote. So long as it is a unanimous, the AGM can be waived for that year.
Just Ask Us!
There is a bundle of laws and regulations that must be complied with correctly to ensure that your company stays in compliance and in good standing with the Registrar. Not having an AGM may have consequences that could ultimately result in the company being dissolved.
If you're looking for guidance on this topic our law firm would be happy to help. You can call us at (902) 826-3070 to set up a meeting or contact us online. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By: Amanda Toulany, J.D.
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