Accordingto the old Companies Act 1965, it is compulsory for incorporation to hold AnnualGeneral Meeting (AGM) once in each year (SSM, 2017).
However, the requirement for AGM for privatecompanies has been abolished under the New Companies Act. This means that when CA 2016 come into force effective on2017, all private companies are not requiredto hold AGM in each year, except required by the constitution or 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 members in the new act 2016.The decisions process for private companies can be made done by the writtenresolutions. However, a resolution to remove an auditor or a director beforethe expiration of his term of office cannot be passed as a written resolution (Kensington, 2017).
On the other hand, public companies remains the same that are compulsory to holdan AGM in each year (q3solutions,2017). Thechanges in the new CA is important to ensure that the responsibilities of the boardsare carried out and to run into their fiduciary duties. Also, the changes madein the CA 2016 is to enhance the internal control, corporate governance as well(Nee. E, 2017). Formerly, shareholders have limitedright, thus it is to encourage the shareholders involved in the dailyoperational of the company (Nee.
E, 2017). The purposes of New Act is to provide all the processand provisions necessary for the smooth running of a company. Under the newCA, there are various policies that have impact on the private companies. For instance, all the necessaryprocess and procedure has to distribute separately such as the selection of auditors and/ or directors,lodgment of annual returns and the tabling of audited financial statements, butnot tied to the holding of an AGM for private companies (Zico law, 2015).
Besides that, even though the members donot have the benefit of the forum of a general meeting to discuss the board ofdirectors on such statements, but they still have a right to obtain auditedfinancial statements (Zico law, 2015). Furthermore, the requirement of unanimousconsent for members’ written resolutions for private companies has been removedin the CA 2016. It is compulsory to pass a written resolution that is signed bythe required majority of eligible members (Zico law, 2015). When the AGMs isremoved from the new CA 2016, it allowedprivate companies to reduce cost of doing businesses. As it is not necessary topay to appoint a company secretary at the point of incorporation (Nee.E, 2017). Asthe private companies do not need to set up AGM, then all the decision can be made by writtenresolution and the notice for the meeting can be sent through electronically (Nee. E, 2017).
This can be clarified as the cost- effectivemeasures. Moreover, the abolition of AGMfor private companies that drive the positive impact is to examine the entireprocess and simplify the rules relating to meetingprocedures as well as provides flexibility inmanaging affairs of companies in order to have the efficiency incorporationprocess and procedure (Isa. A, 2017).