Procedure for Conducting an Extraordinary General Meeting (EGM) under the Companies Act, 2013

An Extraordinary General Meeting (EGM) is an important corporate governance mechanism that enables a company to obtain shareholders’ approval for urgent or special matters or issues that cannot be deferred until the next Annual General Meeting (AGM). Under the Companies Act, 2013, EGMs ensure transparency, shareholder participation, and lawful decision-making in situations requiring immediate attention.

This blog explains the legal framework, authority to convene an EGM, step-by-step procedure, voting requirements, and post-meeting compliances, including additional requirements applicable to listed companies.

Meaning of Extraordinary General Meeting (EGM)

An Extraordinary General Meeting refers to any general meeting of the shareholders other than the Annual General Meeting. Unlike an AGM, which is held annually and deals with routine matters, an EGM is convened as and when required to transact urgent or special business.

Typical matters transacted at an EGM include: -

• Alteration of Memorandum or Articles of Association
• Issue of further shares or preference shares
• Appointment or removal of directors
• Approval of mergers, acquisitions, or borrowings
• Any other matter requiring shareholders’ approval by ordinary or special resolution

Legal Provisions Governing EGM

The conduct of an EGM is governed by the following provisions: -

• Section 100 – Calling of Extraordinary General Meeting
• Section 101 – Notice of meeting
• Section 102 – Explanatory statement
• Section 103 – Quorum for meetings
• Section 104 – Chairman of meetings
• Sections 107–109 – Voting and poll
• Section 114 – Ordinary and special resolutions
• Section 117 – Filing of resolutions
• Section 118 – Minutes of proceedings
• Secretarial Standard–2 (SS-2) on General Meetings issued by ICSI

In the case of listed companies, the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are also applicable.

Who Can Call an Extraordinary General Meeting?

1. Board of Directors

The Board of Directors may convene an EGM whenever it considers it necessary to seek shareholders’ approval for urgent matters.

2. Requisitionists (Shareholders)

Shareholders holding: -

• At least 10% of paid-up share capital carrying voting rights, or
• At least 10% of the total voting power,

may requisition the Board to call an EGM. The requisition must:

• State the matters to be considered
• Be signed by the requisitionists
• Be deposited at the registered office

If the Board does not proceed to call the meeting within 21 days, the requisitionists may themselves convene the EGM within the time prescribed under the Act.

3. National Company Law Tribunal (NCLT)

If it becomes impracticable to call or conduct an EGM in the usual manner, the Tribunal may order the meeting to be called and conducted in such manner as it deems appropriate.

Step-by-Step Procedure for Conducting an EGM

Step 1: Board Meeting to Approve the EGM

The process begins with convening a Board Meeting to: -

• Decide on the necessity of holding an EGM
• Approve the agenda and draft resolutions
• Fix the date, time, and venue for the EGM
• Approve the explanatory statement
• Authorise issuance of the notice

In the case of listed companies, the Board may also: -

• Appoint a Scrutinizer for e-voting
• Approve the e-voting timeline and fix the cut-off date
• Intimate the outcome of the Board Meeting to the Stock Exchange within the prescribed time

Step 2: Issue of Notice of EGM

Notice Period

As per Section 101, at least 21 clear days’ notice must be given to: -

• All members
• Directors
• Auditors

An EGM may be convened at shorter notice if consent is obtained from not less than 95% of members entitled to vote.

Contents of Notice

The notice must specify: -

• Day, date, time and venue of the meeting
• Nature of business to be transacted
• Type of resolutions (ordinary or special)
• Notes regarding proxy and voting rights

Step 3: Explanatory Statement (Section 102)

Every item of special business must be accompanied by an explanatory statement disclosing: -

• All material facts relating to the business
• Nature of concern or interest of directors, key managerial personnel or their relatives
• Financial or other implications, if any

This enables shareholders to make informed decisions.

Step 4: Dispatch and Publication of Notice

The notice may be sent through: -

• Registered post or speed post
• Courier
• Electronic mode (email)
• Hand delivery

Proof of dispatch must be preserved.

For listed companies, additional compliances include: -

• Publication of notice in at least one English and one vernacular newspaper
• Uploading the notice on the company’s website
• Submission of the notice to the Stock Exchange

Where a record date is fixed for e-voting, prior intimation of the same must be given as per applicable regulations.

Step 5: Quorum for the EGM

As per Section 103: -

• Public Company
  • 5 members (up to 1,000 members)
  • 15 members (1,001–5,000 members)
  • 30 members (more than 5,000 members)
• Private Company
  • 2 members personally present

If a quorum is not present within the period of 30 minutes, the meeting stands adjourned in accordance with the Act or Articles.

Step 6: Appointment of Chairman

The Chairman of the Board presides over the EGM. In his absence, the members present may elect a chairman by a show of hands.

Step 7: Conduct of Meeting and Voting

The Chairman conducts the meeting fairly and transparently, ensuring: -

• Discussion of agenda items
• Clarification of shareholder queries
• Proper conduct of voting

Resolutions are passed as follows:

• Ordinary Resolution – Simple majority
• Special Resolution – At least 75% majority

Voting may take place by:

• Show of hands
• Poll
• Electronic voting (where applicable)

Where e-voting is provided, the Scrutinizer shall submit a report to the Chairman, who shall declare the results.

For listed companies, voting results must be: -

• Displayed on the company’s website
• Disclosed to the Stock Exchange within the prescribed time

Step 8: Preparation of Minutes

Minutes of the EGM must be: -

• Prepared within 30 days
• Entered in the Minutes Book
• Signed by the Chairman

Minutes serve as legal evidence of the proceedings.

Step 9: Post-Meeting Filings

As per Section 117, resolutions passed at the EGM must be filed with the Registrar of Companies in Form MGT-14 within 30 days, along with: -

• Certified copy of the resolution
• Notice and explanatory statement

Listed companies must also: -

• Disclose the outcome of the EGM to the Stock Exchange
• Comply with the applicable SEBI disclosure requirements, particularly where resolutions affect securities

EGM through Video Conferencing

EGMs may be conducted through video conferencing or other audio-visual means in accordance with MCA guidelines and applicable regulations.

Important Note for Private Companies

Certain compliances, such as e-voting, appointment of Scrutinizer, newspaper publication, and stock exchange disclosures, do not apply to private companies.

Conclusion

An Extraordinary General Meeting is an essential corporate tool that enables companies to take urgent decisions with shareholder approval. The Companies Act, 2013, read with the Secretarial Standards and SEBI regulations (for listed entities), prescribes a structured, organised, and transparent procedure for conducting an EGM.

Strict adherence to the prescribed procedure ensures the validity of resolutions, enhances corporate governance, and protects the company from regulatory penalties and shareholder disputes.