An Extraordinary General Meeting (EGM) is a meeting called for all shareholders of a company, members of an organization, or employees at an office at a time other than the scheduled Annual General Meeting (AGM).
An Extraordinary General Meeting is always held on an emergency or urgent basis, where the issue is too crucial not to be discussed until the next Annual General Meeting. This only happens in very rare and extreme situations in which the entire membership must be present for a decision to be taken.
Since these are emergency meetings, most people may be involved at a moment’s notice. Thus the purpose of the meeting is always highlighted and spelled out clearly for members to understand the pressing urgency.
Key Takeaways
- An Extraordinary General Meeting (EGM) is a meeting of a company’s shareholders called to discuss and vote on significant matters that cannot be postponed until the next Annual General Meeting.
- The board of directors or shareholders can convene an EGM, and the notice for the meeting must be given in advance to all shareholders.
- The decisions taken in an EGM are binding on the company and its shareholders, and the meeting minutes must be maintained for legal and record-keeping purposes.
Features of an EGM
- Usually, EGMs are held only in very urgent legal and administrative matters. If, for a certain reason, the financial interest or safety of the members concerned is affected, this meeting may be held.
- EGMs may be held on holidays and weekends because of the urgency. This is a primary difference it has from AGMs.
- The board of directors calls AGMs. Shareholders may call an EGM, members of an organization, or even a tribunal.
- In case of the absence of some members, voting on any urgent matters may also take place by proxy. Even though this is not an ideal solution, it is necessary to resolve issues quickly.
- Procedure for the conduction of the meeting may be different than it is at AGMs. Since time is of the essence, only relevant topics may be raised from the minutes of the previous meetings.
Advantages of Extraordinary General Meetings
- Providing an EGM is an absolute necessity to ensure transparency on the part of any organization concerning its members or shareholders. It is key in protecting the members’ interests and ensuring their involvement in important decision-making.
- It is an important way of protecting and helping members of any organization assert their rights. In a company’s bylaws, details may be laid out regarding which situations require the intervention of shareholders through an EGM. This ensures the board of directors is not empowered beyond reason.
- Because there are strict guidelines for the calling of an EGM, it can be said with certainty that members are aware of the gravity of the situation. Further, the requirement to be informed about the issue ensures transparency.
Disadvantages of Extraordinary General Meetings
- Since the problem primarily concerns the board of directors directly, it is possible that the resolution is presented to the members concerned in a manner that suits their purpose.
- An EGM is held on weekends and national holidays. All important shareholders may not be available for that duration, and a resolution may be passed without arriving at a clear majority consensus.
- Proxy votes may not always reflect the reality of the situation.
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Members’ awareness and involvement in urgent matters ensure transparency and ethical decision-making.
Absolutely, transparency is fundamental in maintaining trust and ethical integrity.
This is crucial in upholding ethical standards and governance principles.
Ensuring the involvement of all members and shareholders in significant decision-making impacts the transparency of the organization.
It is necessary that all members have the ability to participate in such critical matters.
An EGM may be held on holidays and weekends, which significantly differs from AGMs due to its urgent nature.
Absolutely, urgency requires flexibility in scheduling the meetings.
Yes, it is indeed important that these meetings are called without delay when crucial decisions need to be made.
It is crucial to ensure the board of directors is not empowered beyond reason, and the involvement of members in an EGM is key to achieving this.
It is important to note that an EGM allows members to assert their rights to ensure the board of directors is not empowered beyond reason.
Members’ rights and involvement are crucial in maintaining a fair and transparent decision-making process.
Members’ involvement through an EGM protects their interests and ensures transparency in decision-making processes.
Transparency is key in maintaining the integrity of decision-making and effective governance.
Absolutely, transparency is integral to maintaining trust and ethical standards within an organization.
It is crucial that members are informed about the issue to ensure transparency.
Exactly. It gives an advantage to protect the rights of members.
Absolutely, all members should be involved in important decisions.
An EGM ensures transparency on the part of any organization concerning its members or shareholders. It is key in protecting the members’ interests and ensuring their involvement in important decision-making.
Yes, it helps the organization maintain transparency with its shareholders even in the most urgent matters.
The involvement of shareholders through an EGM is fundamental in maintaining transparency and ethical governance within an organization.
Absolutely, involving shareholders in urgent matters is necessary for ethical decision-making.
The requirement to be informed about the issue ensures transparency and emphasizes the gravity of the situation.
Indeed, transparency is vital for maintaining trust and integrity within the organization.
The gravity of the situation highlights the importance of full disclosure and transparency.