Everything You Should Know About Extraordinary General Meetings (EGMs) in Singapore
5 minute read
As a founder there are many compliance procedures that you would need to learn about and implement after registering your business in Singapore, one of which is the .extraordinary general meeting (EGM).
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 this 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)
EGM stands for Extraordinary General Meeting in Singapore. It is a meeting of a company’s shareholders to discuss and vote on specific matters that require immediate attention and cannot wait until the next Annual General Meeting (AGM).
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 that require immediate attention from the company’s management, 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 deems it necessary. A company secretary can help with the administrative aspects of organizing and holding both AGMs and EGMs.
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Reasons to call for an EGM
There are several possible reasons why a company might call for an EGM. These reasons can vary depending on the company’s specific circumstances and the applicable laws and regulations in its jurisdiction. An EGM could be organized to address any of the following issues:
Special resolutions: Certain decisions in a company may require a special resolution, which typically requires a higher threshold of shareholder approval compared to an ordinary resolution. Examples of matters that may require a special resolution include amending the company’s articles of association, changing the company’s name, approving a merger or acquisition, authorizing a significant capital expenditure, or altering the share capital structure of the company. If the company needs to take any such action, it may call for an EGM to obtain the necessary shareholder approval.
Urgent matters: In certain situations, a company may face urgent matters that require prompt attention and cannot wait until the next scheduled annual general meeting (AGM). For example, the company may need to address a financial crisis, resolve a legal dispute, or respond to regulatory requirements. Calling an EGM can provide a faster and more efficient way for the company to seek shareholder input and make decisions on such urgent matters.
Shareholder initiatives: Shareholders who collectively hold a certain percentage of the company’s shares may have the right to request an EGM to discuss and vote on specific matters. For example, shareholders may want to propose changes to the company’s corporate governance, executive compensation, or environmental policies. If the required threshold for a shareholder-initiated EGM is met, the company is obligated to call for the meeting and address the proposed matters.
Director or shareholder disputes: Disagreements among the company’s directors or shareholders may necessitate an EGM to resolve the dispute or make important decisions. For example, if there is a deadlock on the board of directors or a shareholder dispute regarding control or ownership of the company, calling an EGM can provide a forum for shareholders to voice their concerns, vote on proposed resolutions, and help resolve the dispute.
Compliance with legal or regulatory requirements: Companies may be required by law or regulations to hold an EGM for certain purposes. For example, if a company wants to approve a major transaction, such as a merger or acquisition, it may be required to obtain shareholder approval at an EGM in compliance with local corporate laws or securities regulations.
- Removal of an executive
- Legal issues
- Issues that cannot be postponed until the next annual shareholders’ meeting
- Changes to the company’s articles of association
- Appointment or removal of directors
- Issuance of new shares
Who can call for an EGM?
The ability to call for an Extraordinary General Meeting (EGM) is typically governed by the company’s articles of association and the applicable laws and regulations of the jurisdiction in which the company is incorporated. In general, the following parties may have the authority to call for an EGM:
Conditions for Calling an EGM
Board of directors
Whenever the board of directors considers it to be appropriate, it holds an extraordinary general meeting of the company.
A member who individually holds at least 10% of the company’s voting shares or multiple members who collectively do so may call upon the directors to convene 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.
An example of when an EGM was called would be Toshiba’s March 2022 EGM, where an urgent meeting was called to address strategic issues that needed to be discussed between all board directors and members.
Extraordinary General Meeting (EGM) vs. Annual General Meeting (AGM)
While both EGM and AGM are types of shareholder meetings, they have some key differences. The table below further helps to illustrate the differences between an EGM and an AGM.
|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|
|Frequency||As needed and is not a regular occurrence||Once a year|
|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)
Check out our free financial year-end guideline to learn more about AGMs in relation to the financial year-end.
Procedure of holding an EGM in Singapore
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?
Need a corporate secretary? Sleek provides your business with hassle-free company secretary services. Outsourcing your company’s secretarial duties is a great way to save time and money, as the process of up-keeping a company in Singapore can be challenging and time consuming.
Our corporate secretary is tasked with keeping your business operations in accordance with the statutory requirements, regulations and laws in Singapore. The corporate secretary is also responsible for managing and ensuring the company’s compliance, and acts as a mediator between shareholders and directors. This includes holding your EGMs, as well as AGMs which are compulsory for your business requirements.
Through Sleek’s all-in-one platform, we streamline your company administrative tasks so you can focus on supercharging your business.
Have any further questions on AGMs and EGMs? Feel free to reach out today, our expert team is here to support you.
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EGM stands for Extraordinary General Meeting.
The key difference between AGM and EGM is that AGM is held annually and is mandatory, while EGM is called when necessary for specific purposes. AGM is primarily focused on reviewing the company’s performance and electing directors, while EGM is focused on specific matters that require the shareholders’ approval.
Under the Companies Act (Chapter 50) of Singapore, the notice period for an Extraordinary General Meeting (EGM) is typically 14 days. This means that the company must give at least 14 days’ written notice to its shareholders before the EGM date. However, if the company’s articles of association allow for a longer notice period, then that longer period must be observed.
The Companies Act (Chapter 50) of Singapore allows companies to hold general meetings on any day, including public holidays and weekends, as long as the notice period and other requirements are met.