Company Annual Report Filling & Holding AGM
One of the fundamental compliance requirements, when you have a company in Bangladesh, is to hold your AGM (Annual General Meeting). This allows all of the company’s shareholders the right to take part in the decision-making process of the company.
This guide will also explain the steps you need to take to stay compliant this annual return season.
Overview:
What is the purpose of an AGM?
What happens at an AGM?
Preparing your financial statements
What if my financial statements are not ready in time?
What if my company is dormant?
When should a company hold its AGM?
Extension and Penalties
Filling Checklist
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Update as of May 2021:
The Companies Act has been amended with effect from 25 February 2020 through passing The Companies (Amendment) Act, 2020 passed in the Parliament by amending the existing Companies Act, 1994.
Do reach out to our support team at LegalSeba at [email protected] with a status of your company’s financial statements preparation. We can then assist to advice on the next step on a case-to-case basis. Ideally, this should be completed within the first Fiscal Year Ending the 30th June of your company incorporation.
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What is the purpose of an AGM?
A company holds an AGM mainly to:
- Present the company’s financial statements
- Seek approval of other business transactions of the company
What happens at an AGM?
Presenting the company’s financial statements
The company has to present its financial statements to all shareholders during the AGM. The financial statements should provide a “true and fair” assessment of the company’s financial performance during the year. After the financial statements are presented, the shareholders have to adopt and approve the financial statements.
Privately held companies usually takes at a maximum 6 months from the end of the fiscal year end to present its financial statements at its AGM.
Approval of other business transactions of the company
The company also approves other business transactions of the company during an AGM. These are a few of the business matters that require shareholders’ approval at the AGM:
- Dividend declaration
- Retirement and appointment of directors
- Appointment of auditors
- Authorization to issue shares
Preparing your financial statements
When: After your financial year ends
Example: Financial statements to be prepared between 1st July and 30th December.
One of the most important things you can do to have a smooth annual return process is to prepare your financial accounts promptly after your financial year end.
Many subsequent steps depend on having those accounts ready. You need to have your financial statements in order to have your AGM; and you need to have had your AGM before you can file for your annual return with RJSC (Registrar of Joint Stock Companies And Firms).
In most instances your financial accounts cannot remain unaudited irrespective of your financial transactions in a given year. If you do need help, reach out to us. [email protected]
What if my financial statements are not ready in time?
In the event that the financial statements are not ready for the presentation at the AGM and annual return, your company secretary can apply on your behalf for an extension of time. There are costs for filing an extension, but these are reasonably minor.
When should a company hold its AGM?
- A company has to hold its first AGM within 18 months from the incorporation date.
- From then onwards, the company has to hold the AGM every year, with the period between two AGMs not exceeding 15 months.
Finalizing the Schedule 10
Schedule 10 consists of the update of Authorized Capital, Paid up Capital, Class of Shares, Paid and unpaid shares of the company duly signed by the Managing Director and Chairman of the company.
Extensions and Penalties
If a company cannot hold an AGM in time (this is often due to a delay in preparing financial statements), they can file for an extension of time with RJSC, up to a maximum of 2 months if allowed. If a company does not meet its deadlines to hold their AGM, or the accounts laid at the AGM were not updated, the company and its company directors are subject to financial penalties by RJSC. Not getting your annual return in on time can leave you with penalty fees as well.
Next steps
Don’t fall foul of your RJSC obligations to hold an AGM – we can help you with the process around your AGM. We’re always available for a chat: contact us to get in touch.
Filling Checklist
- Duly Signed AGM along with Notice
- Schedule 10
- Form 23 (B), Auditor Appointment Letter
- Audited Report duly signed by the Auditor
