by An Extraordinary General Meeting (EGM) is a special meeting of the shareholders or members of a company that is convened outside of the regular Annual General Meeting (AGM) schedule. An EGM is typically called to address urgent matters that require immediate attention and cannot wait until the next AGM. These matters may include significant corporate decisions, changes in governance, or other pressing issues that affect the company.
Members of Extraordinary General Meeting (EGM)
The members who typically participate in an Extraordinary General Meeting include:
- Shareholders:
Individuals or entities that own shares in the company. Shareholders are the primary participants in an EGM. They have the right to vote on the matters being discussed and decided upon during the meeting.
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Board of Directors:
A group of individuals elected by shareholders to manage the company. The board is responsible for presenting the issues requiring urgent attention and providing context and recommendations for the decisions to be made.
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Company Secretary:
An officer responsible for regulatory compliance and governance. The company secretary organizes the EGM, ensures proper documentation, and records the minutes of the meeting.
- Auditors:
Independent professionals or firms responsible for examining the company’s financial statements. Auditors may attend the EGM to provide insights or opinions on matters related to financial performance or compliance.
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Proxy Holders:
Individuals appointed by shareholders to represent them at the EGM. Shareholders unable to attend can appoint proxies to vote on their behalf, ensuring that their interests are represented.
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Legal Advisors (if necessary):
Lawyers or legal experts who provide legal guidance. Legal advisors may attend the EGM to ensure compliance with laws and regulations and to provide legal counsel on the matters being discussed.
Functions of Extraordinary General Meeting (EGM):
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Decision on Urgent Matters:
The primary function of an EGM is to address urgent and significant issues that require immediate shareholder input, such as strategic decisions or responses to unforeseen circumstances.
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Amendments to Articles of Association:
An EGM may be called to propose changes to the company’s Articles of Association, which govern the internal rules and procedures of the company.
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Approval of Mergers and Acquisitions:
If a company is considering a merger, acquisition, or divestment, an EGM may be convened to seek shareholder approval for these critical corporate actions.
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Issuance of New Shares:
Companies may need to raise capital quickly through the issuance of new shares. An EGM can be convened to approve such actions, ensuring that shareholders have a say in the process.
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Appointment or Removal of Directors:
An EGM can be called to address the appointment or removal of directors when immediate action is necessary, particularly in cases of misconduct or changes in leadership.
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Ratification of Previous Decisions:
If decisions made by the board of directors during the interim period need ratification, an EGM can be held to confirm those actions and ensure they align with shareholder interests.
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Special Business Resolutions:
EGMs are often used to discuss and pass special resolutions that require a higher threshold of approval, such as altering the rights attached to shares or approving large capital expenditures.
