An Extraordinary General Meeting (EGM) is unlike the Annual General Meeting (AGM). An AGM is a mandatory yearly gathering of a company’s interested shareholders. However, an EGM refers to any shareholder meeting called by a company other than it’s scheduled annual meeting. It is held when some urgent issue related to the company arises or any situation of crisis and it requires the input of all its senior executives and the Board.
When can an Extraordinary General Meeting be called?
The members/shareholders of a company can call for an EGM. However, only certain members with a significant stake in the company are allowed to call for an EGM. They are listed in the Companies Act,2013 as follows:
- In the case of a company having a share capital, members holding not less than one-tenth of such paid-up capital of the company that carry voting rights in regard to that matter as on the date of depositing the requisition;
- In the case of a company not having a share capital, members holding not less than one-tenth of the total voting power in regard to that matter as at the date of deposit of the requisition.
- EGM called by Board. Upon the receipt of a valid requisition, the Board has a period of 21 days to call for an EGM. The EGM must be then held with 45 days from the day of the EGM being called.
- EGM called by the requisitionists – In case the Board fails to call for an EGM, it can be called for by the requisitionists themselves during a period of 3 months from the day the requisition was deposited. If the EGM is held within this specified period of 3 months, it can be adjourned to any day in the future after the 3 months.
Hence, a notice period of 21 days must be given to the members. However, there is an exception to this rule. Where if 95% of the voting members’ consent is a given, the EGM can be held at a shorter notice.
The following number of members is required for a quorum unless stated otherwise in the Company Article.
- In the case of a public company: five members personally present; and
- In the case of any other company: two members personally present
The shareholders are to give their consent for holding the Extraordinary General Meeting at Shorter Notice.
FAQs
An EGM can be called by the following members:
– Committee member (if approved by the majority of voting committee members) or
– A written request signed by at least 25% of lot owners or their representatives or
– A person authorized by an adjudicator’s order
The minimum full period of notice for all meetings is 14 days, even if a special resolution is to be proposed, except for the AGM of a PLC, which is 21 days. The company’s articles may require a longer period.
A special resolution is a resolution of the company’s shareholders which requires at least 75% of the votes cast by shareholders in favor of it in order to pass. Where no special resolution is required, an ordinary resolution may be passed by shareholders with a simple majority of more than 50% of the votes cast.
Hey @Nandana
Yes, consent for holding a general meeting at shorter notice can be given via email. However, such consent shall be sent before the time fixed for the general meeting.
Hope this helps!