Extra-Ordinary General Meeting (EGM)
An Extra-Ordinary General Meeting (EGM) is a meeting of the shareholders of a company that is convened to discuss and decide on urgent or special business matters that cannot wait until the next Annual General Meeting. EGMs are held whenever important corporate decisions require the approval of shareholders outside the routine agenda of an annual meeting.
Under the provisions of the Companies Act, 2013, an Extra-Ordinary General Meeting may be called by the Board of Directors whenever necessary. In certain circumstances, shareholders holding the prescribed percentage of voting power may also request the company to convene an EGM to consider specific matters.
EGMs are generally convened for matters that require immediate shareholder approval, such as alteration of the Memorandum or Articles of Association, change in company name, approval of major transactions, issue of shares, appointment or removal of directors, or other significant corporate decisions.
Purpose of an Extra-Ordinary General Meeting
The main objective of an EGM is to provide shareholders with an opportunity to discuss and approve important business decisions that require their consent but cannot be postponed until the next Annual General Meeting.
EGMs ensure transparency in corporate decision-making and allow shareholders to participate in major decisions affecting the company’s operations and governance.
When is an EGM Required?
An Extra-Ordinary General Meeting may be convened in the following situations:
• Change in the name of the company
• Alteration of the Memorandum of Association (MOA) or Articles of Association (AOA)
• Issue of new shares or change in share capital
• Appointment or removal of directors or auditors
• Approval of significant corporate transactions
• Any urgent business requiring shareholder approval
Authority to Call an EGM
An Extra-Ordinary General Meeting may be called by:
Board of Directors
The board may convene an EGM whenever urgent business needs to be placed before the shareholders.
Members of the Company
Shareholders holding the prescribed voting rights may request the company to call an EGM to consider specific matters.
Notice for Extra-Ordinary General Meeting
A proper notice must be given to all members, directors, and auditors of the company before holding an EGM. The notice should clearly specify:
• Date, time, and venue of the meeting
• Agenda and details of the business to be transacted
• Explanatory statement for special business items
• Relevant documents or supporting information
Importance of EGM in Corporate Governance
An Extra-Ordinary General Meeting plays an important role in maintaining transparency and accountability within a company. It enables shareholders to actively participate in key decisions and ensures that major corporate actions receive proper approval.
EGMs also help companies address urgent matters efficiently while maintaining compliance with the statutory provisions governing corporate management.
