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Extraordinary General Meeting (EGM) is an emergency meeting or any meeting of shareholders other than the annual general meeting. It is not pre-scheduled. Matters necessitating instant consideration by members, which cannot be delayed till next Annual General Meeting in that case the entities can make available for holding of emergency meetings of the members which are recognized as Extra Ordinary General Meeting.
It can be held by the Board of Directors on the appeal of shareholders or tribunal. It can be held on any day including national holidays. It is not a compulsory meeting by law and held to discuss impulsive situations or crucial matters in which the board generally involves the consent of members.
Requirements for calling extraordinary general meetings
There is a generally a gap of around a year or so in between two annual general meetings. Important businesses arising in between two annual general meetings that require shareholder approval shall be considered at the extraordinary general meetings.
The main concern for conducting an Extraordinary General Meeting can be
Convening of extraordinary general meeting on the requisition of members
Section 100 of the companies Act, 2013, provides that on requisition of members of a company having share capital or not, the Board is required to call and hold extra-ordinary general meeting.
Condition for making requisition
Who can make Requisition?
Those shareholders, who have not paid a call made on them, are not permitted to request for an extraordinary general meeting.
Member right to call requisition meeting
The Board of directors of the company is under a compulsion to immediately proceed to organize an extraordinary general meeting if requisition by members is made in relation in any matters. The board of company shall within 21 days from the date of deposit of a valid requisition proceed to call a meeting within 45 days from the date of deposit of such requisition.
If a company fails to proceed within 21 days and to call the above said meeting within 45 days then the members may call and held themselves a meeting within the period of 3 months from the date of deposit requisition to the company after expiry of 45 days and the expanses for calling meeting by them shall be reimbursed by the company by debiting the amount of the directors. If on a day allotted for meeting on requisition, the acceptable quorum is not present then meeting shall stand cancelled.
Expense reimbursement on members calling extraordinary general meeting
Section 100 states that any judicious expense incurred by the requisitionists in calling a meeting shall be reimbursed to the requisition by the company and the sums so paid shall be subtracted from any fee or other remuneration payable to such of the directors who were in default in calling the meeting.
Point To Be Noted Regarding EGM
Quorum required for EGM
Unless the Article of association permit otherwise, the following number of members is required for a quorum.
At AJSH, we understand the importance of adhering to the statutory compliance regime, failing which, businesses could face serious ramifications that may impact their reputation and operations and of their stakeholders. In this regard, we do provide certain services to our clients in adhering to all statutory compliances under the Companies Act, 2013 including RBI compliances. To know more about EGM and other compliances for a company, kindly contact us.
