- What is Extra-ordinary General meeting (EGM)?
An extraordinary general meeting (EGM) is a shareholder meeting called other than a company’s scheduled Annual General Meeting (AGM) between a company’s shareholders, executives and any other members. The extraordinary general meeting is utilized to deal with urgent matters that come up between annual shareholders’ meetings.
- What provision covers Extra-ordinary General meeting related matters?
Section 100 of the Companies Act, 2013 read with rule 17 of The Companies (Management and Administration) Rules, 2014 deals with matters related to convening of Extra-ordinary General Meeting (EGM).
- When is Extra-ordinary General meeting convened?
There is no fixed time for holding an Extra-ordinary General meeting (EGM) unlike Annual General Meeting. However, there are some business which are urgent which cannot be delayed till Annual General Meeting, this is when Extra-ordinary General meeting (EGM) comes into picture which gives a company freedom to transact business in whom the consent of shareholders/ members are required under The Companies Act, 2013.
- What business are transacted in Extra-ordinary General meeting (EGM)?
As per the Companies Act, 2013 there is no specific list of business which can be passed by (EGM). However, an EGM might be called to deal with any of the following:
- matter on whom approval of members is/are required
- Removal of Director
- Removal of Auditor
- Related party transactions
- Any matter that can’t wait until the next shareholders meeting
Note: there are some matters which cannot be dealt through general meeting and have to be dealt through postal ballot only.
- When is the notice of Extra-ordinary General meeting is given to members?
The notice for Extra-ordinary General meeting (EGM) has to be given at least 21 days clear before the meeting and can be called on a shorter notice like in case of Annual general Meeting along with explanatory business for all the items which are to be transacted.
- What are important matters related to Extra-ordinary General meeting?
An Extra-ordinary General meeting (EGM) can be called by:-
- Company or
- Requisition made by,—
(a) in the case of a company having a share capital, such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;
(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote
A meeting by the requisitionists shall be called and held in the same manner in which the meeting is called and held by the Board.
Any reasonable expenses incurred by the requisitionists in calling a meeting under sub-section (4) shall be reimbursed to the requisitionists by the company and the sums so paid shall be deducted from any fee or other remuneration under the Companies Act, 2013 payable to such of the directors who were in default in calling the meeting.
- Is there any form/ return in respect of holding Extra-ordinary General meeting?
As per The Companies Act, 2013, there are no forms/ returns which are to filled for convening or holding of Extra-ordinary General meeting (EGM). However, as per The Companies Act, 2013 E-form MGT-14 is required to be filled for all special resolutions passed in any general meeting.
- What is penalty for not following provisions for Extra-ordinary General meeting (EGM)?
If a company or any officer of a company or any other person contravenes any of the provisions the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other persons.