Accordingto the old Act, it is compulsory for incorporation to hold AnnualGeneral Meeting once in year (SSM,2017). However, the requirement for AGM for private companies has been eliminatedunder the New CA. This means that whenCA come into effective on 2017, all priate cmpanies aredo not compulsory to get AGM in every year, except required by the or eithervalidly requed by any needed members (q3solutions,2017). There is the different between the old act 196 as allmeetings of pre companies are kwn as meeting of associations in the n act 26.The d process for private companies can be done by the written. However, aresolution to remove an auditor or a director before the expiration of his termof office cannot be passed as a written resolution (Kensington, 2017).On the other hand, public companies remains the same that are compulsory tohold an AGM in every year (q3solutions,2017). Thechanges in the new CA is important to ensure that the responsibilities of theboards are carried out and to run into their fiduciary duties.
Also, thechanges made in the CA 2016 is to enhance the internal control, corporategovernance as well (Nee. E, 2017). Formerly, shareholdershave limited right, thus it is to encourage the shareholders involved in thedaily operational 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, lodgment of annualreturns and the tabling of audited financial statements as well as theselection and retirement of boards, but is irrelevant to the of an AGM forprivate 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 consentfor members’ written for companies hasbeen detached in the 2016. It iscompulsory to permit a written that is engaged the required majority ofeligible associates (Zico law, 2015). When the AGMs isremoved from the CA 206, itallowed companies to diminish cost of doing business.
As it is not necessary to 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 deon can be made by written ojn and the announcement are sent throughelectronically (Nee.E, 2017).
This canbe clarified as the cost- effective measures. Moreover, the elimination of AGM for pe companies that drive thepositive effect is to inspect the entire and simplifythe rules relating tog procedures as well as providesflexibility in managing affairs of companies in order to have the efficiencyincorporation process and procedure (Isa.A, 2017).