Extraordinary General Meeting (EGM) — Section 100

Not every matter requiring a members' decision can wait for the next Annual General Meeting, which may be many months away. For such situations, the Companies Act, 2013 provides for the Extraordinary General Meeting.

Meaning

An Extraordinary General Meeting is any general meeting of a company's members other than an AGM, or an adjourned AGM. It is convened whenever urgent or special business arises that requires the members' approval before the next AGM — for example, an urgent alteration to the objects clause of the Memorandum, an urgent borrowing proposal, or an urgent change to the company's name.

Who May Call an EGM (Section 100)

• The Board of Directors, suo motu — the Board may call an EGM on its own whenever it considers it necessary, to transact any urgent special business.
• The Board, on requisition by members — the Board is bound to call an EGM if requisitioned in writing by members holding, on the date of the requisition, not less than one-tenth (1/10th) of the paid-up share capital carrying voting rights (for a company having a share capital), or not less than one-tenth of the total voting power (for a company not having a share capital).
• The requisitionists themselves — if the Board fails to proceed to call a meeting within 21 days of receiving a valid requisition, the requisitionists (or a majority of them, in value) may themselves call the meeting, which must then be held within 3 months from the date of the requisition. Any reasonable expense incurred by the requisitionists in calling such a meeting must be reimbursed by the company, and recovered by the company from the defaulting directors' remuneration.

Business at an EGM

All business transacted at an EGM is treated as special business — there is no concept of "ordinary business" reserved specifically for the AGM being repeated at an EGM. Every item must therefore be accompanied by an explanatory statement under Section 102, exactly as for special business at an AGM.

AGM vs EGM — the Essential Contrast …