The only time shareholders and managers meet would be during the annual general meeting of a corporation, which usually takes place at a set date and time. It is conceivable to describe an Extraordinary General Meeting (EGM) as a shareholder meeting that is not an annual general meeting (AGM). It takes place when there is an immediate problem with the company or some crisis situation and needs the feedback of all senior management and the Board.
To deal with any of the following, an EGM may be called:
A distinction between the Annual General Meeting and the Extraordinary General Meeting is that it is only possible to hold an Annual General Meeting during regular working hours and not on a national holiday, while an EGM can take place on any day, including holidays.
Furthermore, although the Board of a corporation can only call an AGM, the Board can also call an EGM on the request of shareholders, requisitionists, or tribunals.
It is permissible for those representatives with a substantial stake in the organization to call for an EGM.
The Board has a maximum of 21 days to call for an EGM upon receipt of a valid request. The EGM must then be held 45 days from the date the EGM is named.
If the Board does not call for an EGM, the requisitionists themselves will call for it within a span of 3 months from the day on which the request was deposited. If the EGM is held during this specified span of 3 months, it may be rescheduled to any day after three months in the future.
The basics of a legitimate request are described as follows:
The representatives must be granted a 21-day notice period. There is an exception to this law, however. If 95% of the voting members approve, the EGM can be held on a shorter notice.
The following number of members is necessary for a quorum unless the company’s articles state otherwise.
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