Extraordinary General Meeting
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 Board of directors can be compelled to hold a General Meeting upon request or requisition made for it, under the following conditions –
(a) The requisition must be signed by members holding at least 1/10th of the paid-up capital of the Company, in the case of Companies having a share-capital and by members holding at least 1/10th of the total voting power in other cases.
(b) The requisition must set out the matters considered at the meeting.
(c) The requisition must be deposited at the registrar office of the Company.
The Board must, Within 21 days of the receipt of a valid requisition, issue a notice for the holding of the meeting on a date fixed within days of the receipt of the requisition. If the Board does not hold the meeting as aforesaid, the requisitionists can call a meeting to be held on a date fixed within 3 months of the date of requisition. It is held when some critical matter becomes about the company arises or any condition of emergency and it requires the input of all senior executives and the Board.
Resolutions, properly passed at a meeting called by the requisitionists, are binding on the company. In contrast, an EGM is usually called on short notice and deals with an urgent matter, often concerning company management.