sAGM forms a very important component of every company that works in cooperation with investors and shareholders. All the companies must abide by the law of conducting AGM every single year. No matter if the company is a privately owned company or a government-run organization/ Corporation, the rule applies to all of them except for the one person companies.
Purpose of AGM
Annual General meetings are held for the fulfillment of the following purposes: –
- Conducting the business.
- Providing necessary information to the shareholders about the previous and the future activities and Investments of the company.
- For taking important business-related decisions of the company.
- For the approval of audited company accounts.
- The overall status of the company is presented and front of the shareholders by the chairman of the company during the AGM.
- For the fulfillment of the statutory requirements.
When important decisions are taken, AGM voting takes place. The majority of votes ultimately decide what needs to be done and whether the presented idea should be implemented or not.
Types of AGM voting
Whenever AGM voting is conducted, there are mainly two types of voting systems and which you can vote. They are: –
- Straight voting system
- Cumulative voting system
Why is it important to use your vote in the AGM voting?
- It is an opportunity for the shareholders to express their views and opinions.
- You can vote for the issues that you think are important and will be beneficial to the company and its running presently and even in the future.
- Your vote can matter in ways that you probably don’t even have an idea about. It can help to improve the overall governance of the company.
Moreover, active voting in the AGM can help to safeguard your investment in the company from the activities of organized minority shareholder groups who may misuse and exploit the low vote polls.