Difference between Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)
Basis of Difference | Annual General Meeting (AGM) | Extraordinary General Meeting (EGM) |
---|---|---|
Frequency | AGMs are held once every year. The Companies Act has established the specified time within which AGMs are to be held. Generally, the AGM is held 15 months after the financial year-end. | EGM is conducted as and when necessary to address urgent matters that cannot wait until the next AGM. |
Purpose | The purpose of an AGM is to present the financial statements of the company and discuss matters of the company. An AGM is an interaction between management and shareholders. | The purpose of the EGM is to address those specific extraordinary matters that require the approval of shareholders outside the regular AGM schedule. |
Agenda |
AGM agenda Includes all standard items such as financial statement approval, appointment of directors and auditors, declaration of dividends, and other regular business. |
The EGM includes particular agendas for which it is convened. The agenda of the AGM is specific to the extraordinary matter at hand. |
Notice Period | The requirement for a notice period for an AGM is prescribed by the Companies Act and the company’s Articles of Association to allow shareholders enough time for preparation and attendance. | The notice period for an EGM is typically shorter, as EGMs are convened to address urgent matters. The EGM notice must comply with the statutory requirements for calling a meeting |
Quorum Requirements | The Companies Act has prescribed the minimum quorum required for an AGM. The Companies Act has defined quorum requirements in cases of both private and public companies | The quorum requirement for an EGM may depend on the company’s Articles of Association, but generally, the EGM quorum is lower than that of an AGM, as urgent matters are required to be discussed at the EGM. |
Who Convenes Meeting | An AGM is conveyed by the board of directors. The central government can also call the meeting on the application of members of the company. | An EGM can be convened by the BOD on the requisition of members of the company, the requisitionists themselves, or NCLT. |
Penal Provision | In case a company fails to hold the AGM, every officer concerned in this matter shall be fined up to ₹ 1,00,000. | If the director fails to hold this meeting on requisition, the act allows the requisitionists to hold the meeting and recover the expenses incurred in holding such a meeting. |
Provision applicable | Provisions of Section 96 of the Companies Act, 2013 are applicable. | Provisions of Section 100 of the Companies Act, 2013 are applicable. |
Difference between Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)
Meetings are one such arrangement where both shareholders and office bearers of the company come together to discuss business and non-business agendas. This makes sure that neither shareholders nor the office bearers make any decisions about the company by themselves, which could jeopardize the operations of the company. The Companies Act has provided regulations regarding management and arrangements in cases of Annual General Meetings (AGM), which are held at least once a year to discuss ordinary business agendas, and Extraordinary General Meetings (EGM), which are held on the requisition of members to discuss urgent matters.
Table of Content
- What is an Annual General Meeting?
- What is an Extraordinary General Meeting?
- Difference between AGM and EGM
- Conclusion
- Frequently Asked Questions (FAQs)
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