Extraordinary General Meeting (EGM) – Definition and Examples – AGM

What is an Extraordinary General Meeting (EGM)?

An Extraordinary General Meeting (EGM) is a meeting of shareholders or members of a company that is called for a specific purpose other than the regular annual general meeting (AGM). It is an important event in the corporate governance of a company and provides an opportunity for shareholders to make decisions and vote on matters that require their approval.

Purpose of an EGM

The purpose of an EGM is to discuss and make decisions on specific matters that are not covered in the regular AGM. These matters may include significant changes to the company’s constitution, mergers and acquisitions, changes in share capital, appointment or removal of directors, or any other issues that require the approval of the shareholders.

Calling an EGM

An EGM can be called by the board of directors, the shareholders, or any other person or entity with the authority to do so, depending on the company’s constitution and applicable laws. The notice period for an EGM is usually shorter than that of an AGM, as it is called for a specific purpose and requires urgent attention from the shareholders.

Voting at an EGM

At an EGM, shareholders have the right to vote on the matters discussed and make decisions that affect the company. The voting can be done in person, by proxy, or through electronic means, depending on the company’s constitution and applicable laws.

The decisions made at an EGM are usually binding on the company and its shareholders, and they may require a certain majority or special resolution to be passed. The results of the voting are recorded in the minutes of the meeting and become part of the official records of the company.

Conclusion

An Extraordinary General Meeting (EGM) is a crucial event in the corporate governance of a company. It allows shareholders to discuss and make decisions on specific matters that require their approval. By calling an EGM, the company ensures that important decisions are made in a transparent and democratic manner, in the best interest of the company and its shareholders.

Definition and Examples of Extraordinary General Meeting (EGM)

An Extraordinary General Meeting (EGM) is a meeting of shareholders or members of a company that is called for a specific purpose other than the annual general meeting (AGM). It is an important event where major decisions are made that can significantly impact the company’s operations, structure, or future plans.

Examples of Extraordinary General Meeting (EGM)

1. Approval of a merger or acquisition: When a company plans to merge with another company or acquire another company, it usually requires the approval of its shareholders. An EGM is called to seek the shareholders’ consent for the proposed merger or acquisition.

2. Change in the company’s articles of association: The articles of association define the rules and regulations governing the company’s operations. If there is a need to amend or modify these articles, an EGM is convened to obtain the shareholders’ approval for the proposed changes.

3. Issuance of new shares: If a company wants to raise additional capital by issuing new shares, it needs the approval of its shareholders. An EGM is held to seek the shareholders’ consent for the issuance of new shares and the terms of the offering.

4. Appointment or removal of directors: The shareholders have the power to appoint or remove directors of the company. If there is a need to make changes to the board of directors, an EGM is called to obtain the shareholders’ approval for the appointment or removal of directors.

Overall, an Extraordinary General Meeting (EGM) plays a crucial role in the decision-making process of a company, allowing shareholders to have a say in important matters that can shape the future of the organization.