Procedure For Holding Extraordinary General Meeting (EGM)

     

Procedure For Holding Extraordinary General Meeting (EGM)

Every general meeting other than the annual general meeting or any adjournment thereof, is an extraordinary general meeting in clause 42 of Table 'F' to the Companies Act, 2013 but the Act does not use the name "Extraordinary General Meeting" to indicate a general meeting. One comes across the use of the name "Extraordinary General Meeting" only in section 100 of the Companies Act, 2013 to signify the meeting called on the requisition of members.

Thus, an Extra-ordinary general meeting may be called by the Board of directors any time, subject to the provisions of the Articles of Association to transact any business of special nature. An Extra-ordinary General Meeting is, usually, convened if the matter cannot be postponed till the Annual General Meeting.

Section 100 also provides for convening and holding of an Extra-ordinary General Meeting at the instance of the members. Thus, an Extra-ordinary General Meeting may be called in the following circumstances:—

(a) Calling of the EGM by the Board on its own motion.

(b) Calling of EGM by any director, if at any time there are not within India directors capable of acting who are sufficient in number to form quorum.

(c) Calling EGM by the Board on requisition of members as per provision of the Act.

(d) Calling of EGM by the requisitionists themselves.

(e) Convening of EGM by the Company Law Board/Tribunal.

Extra-ordinary General Meeting convened by the Board

Regulations 42 and 43 of Table F provide that:

(a)All general meetings other than annual general meeting shall be called extraordinary general meeting.

(b) The Board may, whenever it thinks fit, call an extraordinary general meeting.

(c) If at any time directors capable of acting who are sufficient in number to form a quorum are not within India, any director or any two members of the company may call an extraordinary general meeting in the same manner, as nearly as possible, as that in which such a meeting may be called by the Board.

Extra-ordinary General Meeting on requisition of members

Section 100 provides that the Board of directors of a company shall, on the requisition of members of the company forthwith proceed duly to call an extraordinary general meeting of the company.

Who Can Requisition?

The number of members entitled to requisition a meeting in regard to any matter

shall be—

(a) in case of a company having a share capital, such number of them as hold at the date of requisition, not less than 1/10th of such of the paid up capital of the company as at the date carrying voting right in regard to that matter;

(b) in case of a company not having a share capital, such number of them as have at the date of deposit of requisition, not less than 1/10th of the total voting powers of all members having at the date a right to vote in regard to that matter.

Where two or more distinct matters are specified in the requisition, the provisions with regard to number of members required to requisition the meeting shall apply separately in regard to each such matter and the requisition shall accordingly be valid only in respect of those matters in regard to which the condition specified in that subsection is fulfilled. The word ‘valid’ has no reference to objects of requisition but to compliance of requirements of the section itself.

Where two or more persons hold any shares or interest in a company jointly, a requisition, or a notice calling a meeting, signed by one or some only of them shall, for the purposes of this section, have the same force and effect as if it had been signed by all of them.

Board's Obligation

The Board of directors of the company is under an obligation to forthwith proceed duly to convening an extraordinary general meeting if requisition by members is made in relation to any matter. The Board shall within twenty one days from the date of deposit of a valid requisition proceed to call a meeting on a day not later than 45 days from the date of deposit of such requisitions.

If the company fails to proceed within 21 days and to call the above said meeting within 45 days then the members may call themselves a meeting within a period of 3 months from the date of deposit of requisition to the company after expiry of 45 days and the expenses for calling meeting by them shall be reimbursed by the company by debiting the amount to the directors. [Section 100(4)]

Meeting by the Requisitionists

If the Board fails to call the meeting within the time limit, the requisitionists will proceed to call such a meeting by issuing notice to members. Such meeting shall be called in the same manner, as nearly as possible, as one convened by the Board and must be held within 3 months from the date of deposit of requisition. However, the meeting may be adjourned to a date, which falls after the expiry of 3 months passed. The meeting shall stand dissolved, if no quorum is present within half an hour.

It is provided that a meeting called by the requisitionists or any of them—

(a) shall be called in the same manner, as nearly as possible, as that in which meetings are to be called by the Board; but

(b) shall not be held after the expiration of three months from the date of the deposit of the requisition.

However, a meeting duly commenced before the expiry of the period of three months aforesaid, may be adjourned to some day after the expiry of that period.

Related Post :

Draft Board Resolution for Approval of Notice of EGM

Board Resolution for Convening EGM

Draft EGM Notice For Appointment of Independent Director 

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