Extraordinary General Meeting
An Extraordinary General Meeting (EGM) is a shareholder meeting convened outside of the AGM schedule to transact urgent or special business that requires shareholder approval, such as a major acquisition, preferential allotment, or change in capital structure.
An Extraordinary General Meeting (EGM) is a convened meeting of shareholders of a company held at a time other than the AGM, specifically to address urgent business that cannot wait until the next AGM. Under Section 100 of the Companies Act, 2013, the board of directors may call an EGM whenever it deems fit. Additionally, the board is required to call an EGM upon requisition by shareholders holding at least 10% of the paid-up share capital with voting rights (or at least 10% of the total voting power for companies not having share capital).
If the board does not convene the requisitioned EGM within 21 days of receipt of the valid requisition, the requisitionists themselves may call the meeting to be held within three months from the date of deposit of the requisition. This is an important safeguard that allows minority shareholders — especially institutional investors acting collectively — to force a meeting even when the board is reluctant.
Matters typically transacted at EGMs include approval of preferential allotments or rights issues, approval of material related party transactions, change in share capital, conversion of debt to equity, amendment to memorandum or articles, merger or demerger approval, appointment of managing directors or executive directors mid-term, and other matters requiring special or ordinary resolutions that are time-sensitive.
All listed companies are required to provide e-voting facilities for EGMs as well, ensuring remote shareholders can participate. SEBI also requires listed companies to hold EGMs via video conferencing for specified businesses under certain circumstances, improving accessibility.
From an investor's standpoint, EGM notices are important disclosures. The rationale and explanatory statement accompanying each resolution provide critical information about significant corporate decisions. Investors and proxy advisory firms analyse EGM resolutions carefully before advising institutional shareholders on how to vote.