Extraordinary general meeting
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Extraordinary general meeting (EGM) - also known as special general meeting or emergency general meeting. It's meeting different than annual general meeting, due to the nature of the matters discussed. EGM occurs company's most important persons, such as executives, shareholders and other management members. In difference than annual general meeting - EGM is mostly announced in short time before meeting, that's why it is called emergency meeting. Encounter undertakes most significant issues related to company, sometimes Extraordinary general meeting is convoked in order to modify company's system, its necessary procedure.
In order to convene EGM there must be one member, or more members together holding 50 or more percent of paid shared company capital, but it can be different for various company, and should be noticed in company's constitution.
(Extraordinary General Meeting - EGM, Investopedia, 2018)
Procedures of the extraordinary general meeting
Extraordinary general meeting can take place in every capital company, so it is necessary to prepare rules of procedure pointing out how the meeting should look like. It may be different for miscellaneous companies, but in general those are similar, also procedures can be same for annual general meetings, and extraordinary general meetings, but both congregations have different character.
- Terms should start of general provisions, saying that general meetings shall be held in accordance with commercial companies code, company's articles of association, and current rules of procedures.
- Next article should point on how to convene general meetings, and also when annual general meetings takes place. For example, rules of procedure for meetings of ERGIS-EUROFILMS S.A. says that The Management Board shall convene Extraordinary Shareholders Meetings on its own initiative or at the request of a shareholder or a group of shareholders representing at least one tenth of the Company's share capital - (2018, p.1-2).
Meeting must be announced to every person righted to participate in general meeting, form of notification is optional, but it has to be pointed in procedures. For example, it can be posted on company's website, sent via e-mail, text message, or announced in headquarters office. Management have to lay down what informations notification should contain. The most important and obvious informations are date, time and place of general meeting, but it also should include detailed descriptions of issues raised at the meeting, the possibility of engaging a proxy, different ways of attending in meeting (for example through electronic communications programmes). - Article about persons entitled to take part in General Meetings should be also included in terms. That rule says mostly that only shareholders can attend in meeting, it also says for how long they have to be shareholders in order to vote during meeting
- Opening of general meeting. It shall be opened by chairperson (chairperson may be indicated before meeting, or be elected from among the persons attending meeting). There also must be person minuting course of meeting, called notary. Chairperson starts discussion about current issues.
- Agenda of meeting. Announced agenda is accepted if none of persons works for purpose of changing it.
- Conducting the general meeting chairperson have to initiate discussion, and talk through planned agenda. Also chairperson is managing the course of meeting, he shall allow every attendant to make a statement on a matter, and give reply to every statement used by shareholders.
- Minutes of General Meetings shall record that the Extraordinary General Meeting was convoked validly, in harmony with terms allowing it to draw out resolutions. It also should have all resolutions recorded, and results of voting.
(Rules of procedure for the general shareholders meeting of ERGISEUROFILMS S.A. 2018)
References
- Example of rules of procedures (2018).Rules of procedure for the general shareholders meeting. ERGISEUROFILMS S.A.
- Example minutes of Extraordinary General Meeting (2015) Dovey yacht club EGM minutes. Dovey Yacht Club.
- Extraordinary general meeting - EGM. Investopedia (2018)
Author: Michał Rogóż
