What is an Extraordinary General Meeting?

An Extraordinary General Meeting is a meeting which is conducted for all the members of an organization and shareholders in an office, at that point of time, which is scheduled other than the Annual General Meeting (AGM).

Extraordinary General Meetings are held only in the case of emergency or when the topic under discussion is too important to wait until the next planned Annual General Meeting. This rarely happens in extreme circumstances when the full membership is necessary to be available in order to make a decision.

Because these are urgent meetings, the majority of those present will probably be called upon at any time. As a result, the purpose of this meeting is always highlighted and spelled out clearly so that members are aware of the pressing need.

What procedure is required for an Extraordinary General Meeting?

Before calling it, the board of directors formalizes the resolutions to be debated by members and shareholders at the extraordinary general meeting. Members should be briefed about the measures and their significance well in advance to ensure that they can study the topic and adequately express their ideas and concerns.

In the event of a public business, at least five members must be present physically in an EGM, and in the case of any other firm, at least two members must be personally present.

The chairman typically runs the EGM and reads the resolutions out loud. The board must thoroughly understand the situation, appreciate the advantages of the solution to the people, and answer their questions.

Members vote in the best interests of the shareholders and the corporation, and the outcome is announced. Members who cannot join the EGM may choose a proxy who will register on their name. The rules for proxy voting varies from one company to another.

Extraordinary General Meeting Features

1. EGMs are typically held only when there is a pressing legal or administrative issue. This meeting may be called if the financial interests or security of the members involved are harmed.

2. Because of the necessity, EGMs may be conducted on holidays and weekends. This is the main distinction it has over AGMs.

3. The process for scheduling a meeting may differ from AGMs because time is typically of the essence. They may raise only pertinent topics from prior meetings records.

4. If certain members are absent, voting on urgent items may be done by proxy. Even though it isn't the optimal answer, it is essential for speedy problem resolution.

Pros and Cons of Extraordinary General Meeting

Pros

1. It is critical in safeguarding the interests of its members in inquiry and ensuring their participation in essential decision-making.

2. Members are protected and assisted in asserting their rights.

3. Members are aware of the gravity of the situation because there are strict guidelines for conducting an EGM.

Cons

1. Weekends and national holidays are popular times for EGMs, and it becomes challenging for the members to attend it

2. Proxy votes aren't usually accurate reflections of the situation.

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