Quorum required for an EGM
Ensuring the presence of a minimum number of shareholders is crucial in conducting a valid Extraordinary General Meeting (EGM). This minimum number, known as quorum, varies based on the type and size of the company. Meeting the quorum requirement guarantees that decisions made during the EGM are representative and reflective of a significant shareholder presence.
1. In the Case of a Public or Listed Company
Quorum typically involves a minimum of five members personally present if the number of members exceeds 1,000 and 15 members if it exceeds 5,000. This ensures a reasonable representation of stakeholders in larger companies.
2. In the Case of a Private Company
Quorum is generally set at two members personally present unless the company’s articles specify a different number. This recognizes the often smaller scale and ownership structure of private companies.
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