There is an old saying that rules are to be obeyed by the foolish and are guidelines for the wise. There are many in various walks of life in Western Australia, Australia and the world who live by this code. Yet rules, regulations, etcetera are there for a purpose, to give structure and understanding. It is important in many areas that everyone has access to the rules, understands them and obeys them. If this does not happen anarchy prevails.
We have on this site highlighted the fact that Football West failed to hold an Annual General Meeting in 2015 and again in 2016.
Section 250N of the Corporations Act 2001 under which Football West must comply states:
“Public company must hold AGM
(1) A public company must hold an annual general meeting ( AGM ) within 18 months after its registration.
(2) A public company must hold an AGM at least once in each calendar year and within 5 months after the end of its financial year.”
This would appear to be fairly straightforward. However word has reached Not the Footy Show that Football West believe that they do not have to hold an AGM until the required five months after the end of their Financial year. Their Financial year it was reported in February 2016, at the late AGM for 2015, would now end on October 31. For the record it was admitted that this AGM was late, as Football West applied for, even though they were not entitled to, and received an extension from ASIC, who advised them that the AGM had to be held before the end of February.
Where the powers that be may be confused is the use of the word “and” in section 2. If it had said “or,” rather than “and,” then they may have an argument. It does not say “or” so that implies that there is no choice on the issue. Having spoken to ASIC for clarification they stated that the AGM must be held in the calendar year, and if the financial year ends in that calendar year then they can delay reporting the financial figures until the five months are up. If as happens now, the five month period falls outside of the calendar year then the AGM must be held in the calendar year and another meeting called to present the Financial report. There is no grey area, it is apparently black and white.
Section 317 – “Consideration of Reports at AGM” of the Corporations Act is again very clear on this matter. The key point being made in Note 1 as reproduced below:
Consideration of reports at AGM
(1) The directors of a public company that is required to hold an AGM must lay before the AGM:
(a) the financial report; and
(b) the directors’ report; and
(c) the auditor’s report;
for the last financial year that ended before the AGM.
Note 1: If the company’s first AGM is held before the end of its first financial year, there will be no reports to lay before the meeting.
What is hard to fathom is how the Board can make such a mistake. The Board is made up of experienced business men, several with accounting experience, one whose company used to audit Football West’s accounts each year, so there should be no excuse for such an error to occur. One telephone call to ASIC is all it requires and they will explain the situation in very clear and concise terms.
The only time an AGM – there is a reason it is called an Annual Meeting – can be held outside of the calendar year is after its first AGM. Subsequent AGMs of the company must take place in each succeeding calendar year. However, no longer than 18 months should elapse between the date of one AGM and that of the next.
However the 18-month rule cannot be used to authorise the non-holding of an AGM during any whole calendar year which intervenes. What this means is where a company holds its AGM on say the 10th November 2009, it is not permissible for it to take advantage of the 18-month rule and defer the holding of any AGM in 2010. Such an idea being formed on the basis that 18 months from 10 November 2009 runs to 9 May 2011. It has been written that “the obligation to hold an AGM in each calendar year ‘trumps’ the 18-month rule, with the result that the company’s next AGM must be held sometime within the calendar year 2010.”
Where an AGM is not held as required by the Corporation Act, an offence has been committed both by the company and by any of its officers who authorised or permitted the default. In some countries where there has been a failure by the company to convene an AGM, this opens the door for any member of the company to apply to call a General meeting.
The only documents lodged with ASIC since the Financial Report of 2015 on the 23rd of February 2016 are two documents for the “Change to Company Details Appointment or Cessation of A (484E) Company Officeholder” which were lodged on January the 3rd 2017 and the 7th of February 2017. Interestingly the new Website for Football West no longer lists the Board members and when they were appointed, and neither is there a notification for members of these changes.
So with no application for an extension to hold the AGM after the end of 2016 where does that leave the meeting which we hear is scheduled for March?
With this failure to understand and adhere to the laws of the land written in the Corporations Act under which Football West is legally bound is it any wonder that the organisation made a mess of the promotion and relegation between the State League and the National Premier Leagues last season? Maybe that lack of understanding is also why the rules for the coming season are not going to be finalised before the first match of the 2017 NPL season.
Or maybe as was proven in 2016 rules, regulations and laws are simply guidelines for some, and to be abided by by others?