An extraordinary general meeting, commonly abbreviated as EGM, is a meeting of members of an organisation, shareholders of a company, or employees of an official body that occurs at an irregular time. The term is usually used where the group would ordinarily hold an annual general meeting (AGM) but where an issue arises that requires the input of the entire membership and is too serious or urgent to wait until the next AGM. Members and/or shareholders must be informed of the purpose of the EGM so that they may attend in a position where they can discuss and exercise intelligent judgment, or else any resolutions passed are invalid.
In India all the Companies are regulated by The Companies Act, 2013, hence extraordinary general meeting (EGM) are also regulated under same act. Lets us discuss the same in detail.
An extraordinary general meeting (EGM) is a shareholder meeting called other than a company’s scheduled Annual General Meeting (AGM). The extraordinary general meeting is utilized to deal with urgent matters that come up between annual shareholders’ meetings.
Section 100 of the Companies Act, 2013 read with rule 17 of The Companies (Management and Administration) Rules, 2014 deals with matters related to convening of Extra-ordinary General Meeting (EGM).
There is no fixed time for holding an Extra-ordinary General meeting (EGM) unlike Annual General Meeting. However, there are some business which are urgent which cannot be delayed till Annual General Meeting, this is when Extra-ordinary General meeting (EGM) comes into picture which gives a company freedom to transact business in whom the consent of shareholders/ members are required under The Companies Act, 2013.
As per the Companies Act, 2013 there is no list of business which can be passed by (EGM). However, an EGM might be called to deal with any of the following:
Note: there are some matters which cannot be dealt through general meeting and have to be dealt through postal ballot only.
The notice for Extra-ordinary General meeting (EGM) has to be given atleast 21 days clear before the meeting and can be called on a shorter notice like in case of Annual general Meeting along with explanatory business for all the items which are to be transacted.
Any matter which is transacted in Extra-ordinary General meeting (EGM) are special business. However, type of resolution like ordinary or special depends upon the provisions of that particular matter.
An Extra-ordinary General meeting (EGM) can be called by:-
1. Company or
2. requisition made by,—
(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote
A meeting by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board.
Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under the Companies Act, 2013 payable to such of the directors who were in default in calling the meeting.
As per The Companies Act, 2013, there are no forms/ returns which are to filled for convening or holding of Extra-ordinary General meeting (EGM). However, as per The Companies Act, 2013 E-form MGT-14 is required to be filled for all special resolutions passed in any general meeting.
If a company or any officer of a company or any other person contravenes any of the provisions the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other persons.
Disclaimer: – The above article is prepared keeping in mind various provisions relating to Extra-ordinary General meeting (EGM) under the Companies Act, 2013 and rules made thereunder. The author has tried to cover all the important and basic question relating to Extra-ordinary General meeting (EGM). Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.
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