Essentials of a Valid Requisition
Essentials for a valid requisition to call an Extraordinary General Meeting (EGM) are straightforward. Shareholders must collectively own at least 10% of the voting rights, ensuring a meaningful stake. The purpose of the meeting must be clearly stated, promoting transparency among all shareholders. Lastly, submitting the requisition at the company’s office during business hours, following a formal process, ensures a legitimate and well-documented request. These steps create a structured way for shareholders to ask for an EGM.
1. Ownership of Shares
The requisitioning shareholders must collectively hold at least 10% of the paid-up share capital carrying voting rights. This ensures that the request is not arbitrary and is supported by a significant stake in the company.
2. Stating the Purpose
The requisition must explicitly state the purpose for which the meeting is sought. A clear and specific agenda ensures that all shareholders are informed of the issues at hand, fostering transparency in decision-making.
3. Proper Timing
The requisition must be submitted at the registered office of the company during business hours. It should be sent by registered post or delivered by hand, adhering to a formal and documented process.
Extraordinary General Meeting: Meaning, Essentials, Requirements and Quorum
An Extraordinary General Meeting (EGM) is the one that is not an Annual General Meeting (AGM). EGM is held when some urgent issues arise in the company and it requires the input of all the senior executives and the Board. In the complex realm of corporate governance within India, the Companies Act, 2013, stands tall as the bedrock, delineating the legal architecture that governs the operations of companies. This comprehensive legislation lays out the principles and regulations that companies must adhere to, shaping the contours of their functioning. Central to this framework is the provision for meetings, a key arena of corporate discourse. Within this landscape, Extraordinary General Meetings (EGMs) emerge as a focal point, offering a specialized platform for companies to address urgent and critical matters that demand immediate attention.
Geeky Takeaways:
- EGMs go beyond the cyclic predictability of AGMs, allowing companies to respond promptly to critical issues, thereby ensuring a level of responsiveness that aligns with the rapidly changing dynamics of the business environment.
- EGM is held in case of emergencies and requires the attention of senior executives and the Board.
- Members, Shareholders, and executives must be informed of the purpose of the meeting so they have time to prepare their valuable input and collectively decide on further course of action.
Table of Content
- What is an Extraordinary General Meeting?
- Who can Call for an EGM?
- Essentials of a Valid Requisition
- Requirements for Holding an EGM
- Quorum required for an EGM
- Conclusion
- Extraordinary General Meeting- FAQs