EGM stands for Extraordinary General Meeting.
An Extraordinary General Meeting (EGM) is a formal meeting of a company's shareholders that is called outside of the usual scheduled annual general meeting (AGM). As stated in the reference, an EGM is an urgent meeting called to address pressing company issues or emergencies.
Understanding Extraordinary General Meetings (EGMs)
Unlike a company's Annual General Meeting (AGM), which happens at a regular interval (usually yearly) to cover routine business like approving financial statements and electing directors, an EGM is convened specifically when urgent matters arise that cannot wait until the next scheduled AGM.
These pressing issues require immediate shareholder attention and decision-making to ensure the company can react promptly to unexpected situations or seize critical opportunities.
Reasons for Calling an EGM
While the specific reasons vary depending on the company and the situation, EGMs are typically called to address significant events such as:
- Considering or approving a major acquisition or merger.
- Addressing a corporate crisis or emergency situation.
- Approving significant changes to the company's structure or constitution.
- Electing or removing directors mid-term.
- Discussing and voting on extraordinary resolutions that require immediate action.
- Raising urgent capital through new share issuance.
Calling an EGM involves following specific legal procedures outlined in the company's constitution and relevant laws, including providing adequate notice to shareholders detailing the agenda.
Key Characteristics of an EGM
| Characteristic | Description |
|---|---|
| Purpose | Address urgent, pressing company issues or emergencies. |
| Timing | Called extraordinarily as needed, not on a regular schedule. |
| Attendees | Shareholders, directors, and potentially other relevant parties. |
| Decision Making | Shareholders vote on specific resolutions related to the urgent agenda items. |
In summary, an EGM is a critical tool for companies to gather shareholder input and approval quickly when faced with matters of significant urgency that impact the business's direction or stability.
