Everything You Should Know About Extraordinary General Meetings (EGMs) in Singapore
5 minute read
As a founder there are some compliance procedures that you would need to learn about after registering your business in Singapore.
An extraordinary general meeting (EGM) is a shareholder gathering that is usually called to address pressing issues that arise between annual general meetings (AGM) that need to be addressed immediately or in an urgent capacity.
In our article, we summarize everything you need to know about EGMs, the differences between this non-compulsory meeting and an AGM, and how to hold one.
The Extraordinary General Meeting (EGM)
An official meeting of the body of members of an organization, shareholders of a firm, or employees is known as an extraordinary general meeting (EGM). The Articles of Association, also known as written rules of the company, details how to hold general meetings other than AGMs.
In many situations, the only opportunity for executives and shareholders to meet is during the company’s annual general meeting (AGM), which generally occurs once a year at a set date and time. However, sometimes business problems occur, and it might be impossible to let these critical issues go undiscussed before the next AGM comes by.
Hence, an extraordinary general meeting is held at random or critical times with shorter notice, when the board of directors deem it necessary. This is usually a situation that requires immediate attention from the company’s management. A company secretary can help with the administrative aspects of organizing and holding both AGMs and EGMs.
What situations call for an EGM?
An EGM could be organized to address any of the following issues:
- Removal of an executive
- Legal issues
- Issues that cannot be postponed until the next annual shareholders’ meeting
Who can call for an EGM?
The board of directors can schedule an EGM.
An EGM can also be called by a member who owns at least 10% of the company’s voting shares individually or by a group of members who own at least 10% of the company’s voting shares collectively.
Last but not least, authorities have the ability to call an EGM. The court may require a business to have an EGM if calling for a meeting in a normal manner is deemed too difficult. This might be due to deadlocks in the firm’s daily management or if said company has failed to meet quorum requirements.
A real-life example of an EGM would be Toshiba’s upcoming EGM in March 2022. The reason behind the meeting is an urgent strategic issue that needs to be discussed between all board directors and members.
Extraordinary General Meeting (EGM) vs. Annual General Meeting (AGM)
The table below helps to illustrate the differences between an EGM and an AGM.
To learn more about AGMs in relation to the financial year-end, feel free to check out our free financial year-end guideline.
|Reason behind meeting||Urgent business matters||Mandatory annual meeting|
|Participants||Directors, shareholders, and board members||Directors and shareholders|
|Who can call it?||Board directors, members, and shareholders (10% + shares)||Directors|
|When can it be held||Any day, including weekends and holidays, at any time||During working days, and business hours|
|Validity basis||Quorum||Passing the resolution by written means|
|Fundamental purpose||Resolving urgent issues||Presenting financial statements and approving other company transactions|
|Minimum number of days of notice|
14 days – special resolutions (Private companies)
21 days – special resolutions (Public companies)
Process of holding an EGM
Depending on the company type, the regulations for conducting an EGM and the possibilities for changing a resolution at an EGM, as well as taking votes from proxies, will differ.
Step 1: Recognizing the agenda of the meeting
Before the meeting, the company board of directors would decide on multiple resolutions (agendas that require voting) before discussing and voting on it during the EGM.
EGMs can be held on any day, including weekends and holidays, due to its urgent and unplanned nature. This is one key difference between an EGM and AGM, as AGMs can only be held on working days, during business hours.
Step 2: Notifying the necessary stakeholders
The company needs to deliver written notice of the EGM to shareholders and members, along with remarks explaining its significance. The minimum notice period for EGMs with special resolutions for private companies is 14 days.
However, EGMs with special resolutions for public companies require a minimum notice period of 21 days. The notice period might differ depending on the company’s prior constitution.
Step 3: Holding the EGM
During an EGM, the chairperson usually reads the resolution and recommends it for acceptance to those in attendance. The resolution is how shareholders of the company decide, by voting. The chairperson also handles questions concerning the decision, oversees the voting of those in attendance, and announces the vote’s outcome. An EGM, and its resolutions, is only valid if the quorum (minimum number of members entitled to vote) is met during the meeting.
Step 4: Post-meeting action
When resolutions are passed by the end of the meeting, this means that the proposal is agreed upon by all, if not most, of the shareholders.
In some circumstances, however, there are steps to take following an EGM to make the approved resolution(s) official.
One example is when a company is wound up voluntarily by an EGM passing a special resolution. A copy of the special resolution must be sent to the Accounting and Corporate Regulatory Authority (ACRA) within 7 days.
A notification of the same resolution must also be published in at least one Singapore newspaper within 10 days. The directors can then choose a liquidator and begin voluntary winding-up proceedings.
How can Sleek help?
Sleek provides your business with hassle-free company secretary services and governance.
Let us support your needs with our all-in-one platform, streamlining your company admin. That way, you can place all the focus on your most important tasks. Our corporate secretary services include the holding of AGMs and ARs which are compulsory for your business requirements.
Have any further questions on AGMs and EGMs? Feel free to reach out today, our expert team is here to support you.