Accordingto the old Act, it is compulsory for incorporation to hold AGMin once year (SSM, 2017). However, the requirement for AGM forprivate companies has been abolished under the . This means that when CA 2016 come into force effective on2017, all private companies are not to holdAGM in every year, except required by the constitution and either validlyrequired by any needed members (q3solutions,2017).
There is the different between the old act 1965 as allmeetings of private companies are known as meeting of associates in the act .The process for private companies can bemade done by the resolutions. However, aresolution to remove an auditor or a director before the expiration of his termof office be passed as written (Kensington,2017). On the other hand, public remains thesame that are to hold an AGM in every year (q3solutions, 2017).Thechanges in the new is important to ensure that the responsibilities of theboards are run into the fiduciary duties. Also, the made in the CA 2016 is toenhance the internal control, corporate governance as well (Nee. E, 2017).
Formerly, shareholders have right,thus it is to encourage the shareholders involved in the daily operational ofthe company (Nee. E, 2017). The purposes of Act is to provide all the process and requirementsnecessary for the smooth in succession of a company. Under the act of the, there are various rulesthat have effect on the private companies.
For instance, all the necessary progression and procedure has todistribute separately such as theselection of auditors or/ and director, lodgment of annual returns and the postponingof audited financial statements, but irrelevant to the holding of an AGM for companies(Zicolaw, 2015). Besidesthat, even though the they do not have the advantage of the forum of a generalmeeting to discuss the board of directors on such statements, but they stillhave a exact to obtain audited financial statements (Zico law, 2015). Furthermore, the obligationof unanimous consent for members’ written resolutions for private companies hasbeen detached. It is compulsory to pass a transcribed resolution that is signedby the compulsory majority of eligible associates (Zico law, 2015). When the AGMs isremoved from the new rules and provision, it allowed private companies to diminish fee of burdenbusinesses. As it is not necessary to fee to appoint a company secretary at thepoint of incorporation (Nee. E, 2017).
As the private companiesdo not need to set up AGM, then all the decision can be made by transcribed resolution and the announcement forthe meeting can be directed through electronically (Nee. E, 2017). This can be clarified as the cost- effectivemeasures. Moreover, the elimination ofAGM for private companies that drive the positive impact is to observe theentire progression and simplify the rulesrelating to meet procedures as well as providesflexibility in managing affairs of companies in order to have the efficiencyincorporation process and procedure (Isa.A, 2017).