Information Circular - Explained
What is an Information Circular?
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What is an Information Circular?
An information circular is a document that serves as a notice of meeting to a company's shareholders and also outlines the agenda for a company's shareholders meeting. The important issues that will be deliberated on at a shareholders meeting are contained in an information circular. An information circular is an important document that gives shareholders a heads up about the agenda of a meeting and their expected contributions. Through an information circular, shareholders become are of possible happenings in a company and actions they need to take at the meeting. Other names given to an information circular are;
- Notice of Annual (Special) Meeting of Stockholders or
- Management Information Circular.
How Does an Information Circular Work?
An information circular is sent to all shareholders by the board of directors of a company or the management to inform them about an annual stockholders meeting. In cases of potential acquisitions, directors elections and amendment of a company's charter, shareholders are given notice before time through an information circular. Generally, an information circular provides facts on matters pertaining to a company that will be discussed at the annual Stockholders meeting. It gives a sense of direction to shareholders that will attend the meeting and facts to those that will not. An information circular is often accompanied by a proxy circular, this is a document that stipulates procedures for voting on vital issues or director election.
Information Circular and Annual Shareholders Meeting
The annual general meeting of a company is an important event both for the company and its shareholders. It is where decisions that will affect the future of the company will be made, which will, in turn, have an effect on the position of the stockholders. As a meeting held once in a year, it is expected of a company's board of directors or management to inform shareholders of the schedule of the agenda of the meeting ahead of time. An information circular is used by company management to inform shareholders of AGM and also spell out the activities that will take place at the AGM. It prepares shareholders on important discussions as well as voting processes if there will be any. The information circular is critical in prepping shareholders on points to be discussed. Holding annual general meetings is a requirement for both private and public companies in many states. When an information circular is passed across all shareholders, it is expected to contain these core items;
- Minutes of the previous annual general or stockholders meeting.
- The annual financial statement of the company.
- Decisions made and actions taken in the previous year with the approval of the shareholders.
- The outline of discussions at the current AGM is also called the agenda of the meeting.
- Procedures for voting during directors election.
- Corporate Governance Law (Intro)
- What is Business Governance?
- Berle-Means Thesis
- Corporate Governance Rating Definition
- Who are the members of a corporation?
- Corporate Charter
- Shareholder Register
- Common Stock
- Preferred Stock
- Par Value
- Authorized Shares
- Issued Shares of Stock
- Unissued Shares of Stock
- Outstanding Shares
- Institutional Shares
- Dual Class Shares
- What is a closely-held corporation?
- Close Corporation Plan Definition
- What is a Private Company vs a Public Company?
- What is the role and purpose of the corporation?
- What is the Agency theory of corporate governance?
- Shareholder-Centric Perspective
- Shareholder Value
What is the Stakeholder theory of corporate governance?
What is the role & rights of Shareholders in the corporation?
- Shareholder Democracy Definition
- Quorum Definition
- Class Voting Shareholders
- Changing the Voting Rules
- Supermajority (Voting)
- Shareholder Sponsored Proposal
- What are the variations on attributes of Ownership structure?
- Stock Split
- What are the fiduciary duties owed by shareholders?
- When is a shareholder personally liable for corporate obligations?
- Appraisal Rights
- Dissenter's Rights
- Say on Pay Rights
- How can shareholder enforce their rights (direct and derivative actions)?
- What is the process for bringing a Derivative action?
- What are corporate vote Proxies?
- Proxy Statement
- Proxy Fight or Contest Definition & Explanation
- What is Shareholder Activism and the significance of Institutional Investors?
- Activist Investor
- Overview of Board of Directors
- Board Decision Making
- Advisory Board (Observer Directors)
- What is the role of the Board of Directors?
- Board of Trustees
- Board of Governors
- Outside Director
- Outside Director or Non-Executive Director Definition
- Independent Outside Director
- Budget Committee
- Audit Committee
- Compensation Committee
- Nomination Committee (Corporate Board)
- What standards govern the actions of the board of directors?
- Duty of Candor Definition
- Board Evaluation Definition
- What is the Business Judgment Rule?
- What is D&O insurance?
- Codetermination (Foreign)
- What is the role of Managers of the corporation?
- What standards govern manager actions?
- Chief Executive Officer (CEO)
- Chief Financial Officer
- Chief Information Officer (CIO)
- Chief Investment Officer (CIO)
- Chief Legal Officer
- Chief Operating Officer
- Chief Risk Officer
- Chief Security Officer
- Chief Technology Officer (CTO)
- What are the primary state and federal corporate governance laws?
- What is the role of the state in corporate governance?
- What is the role of Securities Laws in corporate governance?
- What is the role of the Foreign Corrupt Practices Act in corporate governance?
- What is the Sarbanes-Oxley Act (SOX) effect on corporate governance?
- Sarbanes-Oxley Act (SOX)
- What is the Dodd-Frank Wall Street Reform and Consumer Protection Act effect on corporate governance?
- Corporate Monitors
- What industry organization standards affect corporate governance?
- How do proxy advisory firms affect corporate governance?
- What is the role of ethics in corporate governance?
- What are the major causes of corporate governance issues?
- What are the access to information issues?
- What are decision-making structure issues?
- What are the power struggle or competition issues?
- Holding Company
- What are hostile takeovers and defenses to hostile takeovers?
- Williams Act
- Staggered Board
- Delay-Tactic Defenses?
- Legal Lockup Defenses?
- White Knight and Pac Man Defenses?
- Jonestown Defense
- Lady Macbeth Strategy
- Macaroni Defense
- Yellow Knight
- Back-end Plan Definition
- Backflip Takeover Definition
- Dead Hand Provision Definition
- Kamikaze Defense
- Operating Company Property Company Model
- Scorched Earth Policy Definition
- Revlon Rule
- What are benefit-alignment issues?
- Cadbury Rules Definition