Introduction
General meetings come in two forms; an Annual General Meeting (‘AGM’) and an Extraordinary General Meeting (‘EGM’). Both meetings have different functions. You can learn more about what an AGM is here, and about the main differences between these meetings here. This post will focus on what an EGM is.
Annual General Meeting
An AGM is a mandatory meeting held every year. When they occur, a company’s interested shareholders gather to hear updates from directors about the company’s performance and future strategy. It is also an opportunity for members to ask questions and elect the company’s governing board.
Extraordinary General Meeting
An EGM is a shareholder meeting that is not the company’s scheduled AGM. The EGM will deal with matters requiring the general membership to make a decision, and will be convened in accordance with the association’s constitution.
An EGM will usually deal with urgent matters that arise between AGMs. When these occurrences happen, shareholders will come together on short notice to deal with these matters. Reasons to call an EGM include:
- Removal of an executive member; or
- To deal with a legal matter; or
- To discuss any issues that are time sensitive and can not wait until the next AGM.
Calling an Extraordinary General Meeting
The Corporations Act 2001 (Cth) states that the directors of a company must call and arrange a general meeting on the request of members with at least 5% of the votes that may be cast at the general meeting.
The organisation’s constitution may also contain provisions prescribing an alternative means for members to call an EGM. However, the constitution can only provide members with ways to call an EGM that are less onerous than those set out in the Corporations Act.
Whilst an AGM can be held only during business hours and not on a national holiday, an EGM can be held at any time of the year, including during holidays. Further, an association can hold as many or as few EGMs as they want.
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Providing Notice for an Extraordinary General Meeting
Then, notice of request for an EGM must be given to the organisation’s secretary (or chairperson if the secretary is absent).
The request must:
- Be in writing;
- Be signed by the members making the request; and
- State any motions which the owners want to have decided at the meeting.
Upon receipt of the request, the directors must call an EGM within 21 days, and the meeting must be held no later than 2 months after the request is given.
An EGM notice is to be provided personally or sent to the individual’s address. The meeting notice must include:
- The time and location of the meeting;
- The agenda;
- A Proxy form;
- A voting paper for motions not being decided by secret ballot;
- For motions decided by secret ballot;
- A secret voting paper
- An envelope marked ‘secret voting paper’
- A separate particulars tab or envelope
- A company nominee form (if the owner is a company);
- An explanatory schedule.
Conclusion
In conclusion, an EGM is an ad-hoc meeting that occurs in response to an urgent matter. If you require assistance in understanding your legal obligations, consult a Company Lawyer.
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