What is an Extraordinary General Meeting?

What is an Extraordinary General Meeting?

An Extraordinary General Meeting (EGM) is an exceptional assembly convened by a company to deliberate and decide on matters of urgency that cannot await the routine schedule of an Annual General Meeting (AGM). AGMs, which follow regular intervals, serve as forums for routine corporate activities. In contrast, EGMs are summoned on an ad-hoc basis, responding to exigent circumstances that necessitate immediate attention. Unlike the more predictable and routine nature of AGMs, EGMs provide a dynamic platform for active shareholder participation in decision-making processes....

Who can Call for an EGM?

An Extraordinary General Meeting (EGM) can be called by either the Board of Directors or Shareholders. The Board initiates an EGM when urgent matters arise, emphasizing their governance role. Shareholders, collectively holding at least 10% of voting rights, can also request an EGM, giving them a direct say in decision-making. This dual approach ensures a balanced involvement of both the company’s leadership and its shareholders in convening crucial methods....

Essentials of a Valid Requisition

Essentials for a valid requisition to call an Extraordinary General Meeting (EGM) are straightforward. Shareholders must collectively own at least 10% of the voting rights, ensuring a meaningful stake. The purpose of the meeting must be clearly stated, promoting transparency among all shareholders. Lastly, submitting the requisition at the company’s office during business hours, following a formal process, ensures a legitimate and well-documented request. These steps create a structured way for shareholders to ask for an EGM....

Requirements for Holding an EGM

Conducting an Extraordinary General Meeting (EGM) involves meeting specific requirements outlined by the Companies Act, 2013. These requirements encompass giving adequate notice to stakeholders, clearly defining the agenda, and providing provisions for proxy participation. These procedural aspects ensure that EGMs are conducted transparently and in accordance with established standards, fostering inclusivity and informed decision-making among shareholders....

Quorum required for an EGM

Ensuring the presence of a minimum number of shareholders is crucial in conducting a valid Extraordinary General Meeting (EGM). This minimum number, known as quorum, varies based on the type and size of the company. Meeting the quorum requirement guarantees that decisions made during the EGM are representative and reflective of a significant shareholder presence....

Conclusion

EGMs play a pivotal role in the corporate governance structure, allowing companies to address urgent matters that may arise between AGMs. Whether convened by the board or requisitioned by shareholders, these meetings facilitate transparent decision-making and provide a forum for shareholders to express their opinions....

Extraordinary General Meeting- FAQs

Can the board convene an EGM without shareholder requisition?...