Difference between Annual General Meeting and Extraordinary General Meeting
An annual general meeting (AGM) is a formal meeting that is held by companies once every year in order to deal with ordinary business. It is the general meeting which must be held by the company every year, to discuss various business matters. According to the law, all companies are obligated to hold an annual general meeting every year. On the other hand, an extraordinary general meeting or the EGM is a type of company meeting that is convened by the Directors of a company in order to deal with any special business that is so important that it cannot wait until the next Annual General Meeting (AGM) to be dealt with. It is any meeting other than the AGM in which businesses relating to the company’s management are transacted. The above definitions of AGM & ECM indicate some differences between the two general meetings. The difference is explained below:
AGM
- Definition: An annual general meeting is a formal meeting that is held by companies once every year in order to deal with Ordinary business.
- Notice: A 21 days’ notice must be issued before the AGM is held.
- Interval: Held once every year.
- Legal obligation: All companies are obligated to hold an annual general meeting every year.
- Reason: AGM’s are held to discuss profit distribution, remuneration, new alterations, re-appointment of directors etc.
- Penalty: When the meeting is not summoned within the stipulated time, the penalty is levied.
EGM
- Definition: An extraordinary general meeting or the EGM is a type of company meeting that is convened by the Directors of a company in order to deal with any special business.
- Notice: A 14 days’ notice must before the EGM is held.
- Interval: EGM has no regular interval.
- Legal obligation: EGM has no legal obligations.
- Reason: EGM is held to discuss very urgent matters.
- Penalty: No penalty is prescribed as per law.
