Extraordinary general meeting

It provide knowledge about extraordinary general meeting (E G M)

1. EXTRAORDINARY GENERAL MEETING (EGM)

2. What is EGM ? An Extraordinary General Meeting (EGM) is a meeting other than the Annual General meeting between a company’s shareholders , executives and any other members . An EGM is usually called on short notice with urgent matter . Regulation 42 of table F provides that all general meeting , other than annual general meeting shall be called extraordinary general meetings. An extraordinary general meeting is normally convened to deal with a matter which cannot be postponed till the holding of next AGM . For example , alteration of the objects of the company , change of registered office or removal of a director or auditor .

3. Who can convene an EGM ? Section 100 provides that an EGM may be convened or called by : The board of directors on its accord ; Directors on Requisition The requisitionists themselves The tribunal

4. (a) The Board of Directors Section 100 (1) provides that directors collectively as a board , can call an EGM , by passing an ordinary resolution at a board of directors meeting , which is duly convened and properly constituted The board of directors must give a clear 21 days notice before holding an EGM . A shorter notice however may be valid , if 95 per cent or more of the member entitled to vote, give their consent in writing or by electronic mode

5. (b) Directors on requisition As per section 100(2) of the company Act the board of directors must convene an EGM upon receiving a written request or requisition from : Members holding 10 per cent or more of the paid-up share capital that carries the right to vote in case of a company having share capital Member holding 10 per cent or more of the voting power of the company , if the company does not have share capital As per rule 17(1)of company (management and administration) rules 2014 the requisition must be given to the company a clear 21 days prior to the proposed date of such extraordinary meeting either in writing or through electronic mean It should be signed by all the requisitionists or anyone behalf in writing , it must be sent to the registered office of the company

6. Requisition must clearly state the purpose of the meeting . Must clearly set out the matters which need consideration [Section 100 On receiving the requisition move to convene or call a meeting . Atleast 21 days notice must be given before holding a meeting . Thus extraordinary general meeting must held within 45 days of the receipt of the requisition[Section 100(4)]

7. (c)The requisitionists themselves Section 100(4) provides that if the Board of Directors fails to call an extra ordinary general meeting within 45 days of deposit of a valid requisition , then the meeting may be called by the requisitionists themselves The extra ordinary general meeting called by the requisitionists must be held within 3 months of date of deposit of the requisition . As per rule 17(2) of company (management and administration) Rules 2014, the requistionists should convence the meeting at the registered office or in the same city/town where the registered office is situated Directors must provide all assistance to the requisitionists in holding a general body meeting . However the registered office is not made available to the requisitionists to hold the meeting , they may hold the meeting elsewhere If in a requisitioned meeting there is no quorum present within half an hour of the time fixed for the meeting , then as per Section 103 , the meeting stands dissolved. The company is bond to repay all reasonable expenses incurred by the requisitionists in calling a meeting .

8. (d)The Tribunal The Section 98 provides that if for any reason , it is impracticable for company to call a meeting of the company , other than an annual general meeting , according to the provisions of articles or the companies Act , then the Tribunal may either: On its own motion (suo -moto) On an application of any director of company On an application of any member of the company who would be entitled to vote at the meeting Order a meeting of the company to be called ,held and conducted in any manner as it deems fit Gives such ancillary or consequential directions which it thinks expedient , including directions to modify the provisions of the companies Act and of the articles of the company related to calling ,holding and conducting of a meeting . It can also direct that one member present in person or by proxy shall be deemed to constitute a meeting

9. The Tribunal has been vested with the powers to call an EGM only if it is impracticable needs to be interpreted Where shareholders are themselves in a position to requisition an extra ordinary general meeting , but without availing themselves of that procedure , apply to the Tribunal, it should not make the order Th e Tribunal should not call an extra ordinary general meeting , if there is aboard of director who can call a meeting. The Tribunal should use the powers granted under Section 98 sparingly and with caution , so that it does not become either a shareholder or a director trying to participate in the internal squabbles of the rival groups Section 99 provides tha t if the provisions of Section 98 are not complied with , then the company and every officer in default shall be liable to be fined upto rs. 1 lakh and in case of a continuing default with a further fine of rs. 5000 per day of default .

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