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For a listed company in India that is obligated to hold an annual general meeting (AGM) once a year as per the company law, there might arise a situation that needs to be handled urgently and can’t wait for the next AGM. This is when an Extraordinary General Meeting (EGM) is called. An EGM is a special sitting of shareholders to decide on matters that are unplanned, urgent, and too significant to postpone.
This article breaks down what an EGM means under the Companies Act, 2013, in what ways it differs from an AGM, the legal process for notice and quorum, and what it means for shareholders tracking that stock.
Key Takeaways
- An EGM is any shareholder meeting convened under Section 100 of the Companies Act 2013 to transact urgent or special business.
- The company’s board, requisitioning shareholders, or the National Company Law Tribunal (NCLT) can call an EGM.
- Shareholders need at least one-tenth of the paid-up voting capital to force an EGM.
- Companies are obligated to issue a 21-clear-day notice for an EGM with an explanatory statement; though 95% shareholder consent allows a shorter notice period.
- It is mandatory for listed companies to report the summary proceedings of an EGM to stock exchanges within 12 hours, submit the voting results within 2 working days, and offer remote e-voting facilities to its members.
What is an Extraordinary General Meeting (EGM)?
Every company registered under the Companies Act, 2013 must hold an AGM once a year to place its financial statements, dividend decisions, and director appointments before shareholders.
Not everything runs by a clock. Sudden unplanned events can surface that cannot reasonably wait for 12 months. These might include a hostile takeover bid, a director’s sudden resignation, or a proposal to raise fresh capital. In such situations, the company calls an EGM instead.
An EGM is simply a general meeting of members held outside the AGM cycle. There is no fixed calendar for it. A company can hold none, one, or several EGMs in a single financial year. What sets them apart legally is the nature of the business transacted there. Everything discussed at an EGM is classified as “special business,” which means it comes with stricter disclosure obligations than routine AGM matters.
AGM vs EGM: Key Differences
Though both AGMs and EGMs bring shareholders together to vote on company matters, the two serve very different purposes. Here is how they compare side by side:
| Parameter | AGM | EGM |
| Frequency | Mandatory once every financial year | Held only when a specific need arises |
| Timing | Within 6 months of the financial year-end; gap between two AGMs cannot exceed 15 months | No fixed timeline; can be called at any point in the year |
| Nature of business | Ordinary business (accounts, dividend, auditor and director appointments) plus any special business | Only special business, each needing an explanatory statement |
| Who can call it? | The Board of Directors, mandatorily | The Board of Directors, a director, requisitioning members, or the NCLT |
| Day and time | Must be during business hours (9 AM-6 PM) on any day except a National Holiday | Can be called on any day including a National Holiday, during standard business hours (9 AM-6 PM) |
| Consequence of default | Penalty on the company and officers; members can approach the Tribunal | No fixed default penalty, but requisitionists can convene it themselves if the Board delays |
| Venue | Registered office or within the same city/town/village (Unlisted co. can hold anywhere in India with 100% consent) | Any place within India (fully-owned overseas subsidiaries may hold outside India) |
Why do Companies Hold an EGM?
An EGM is called whenever a matter requires shareholder consent but is too time-sensitive, or too significant, for the next scheduled AGM. Common triggers include:
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Altering the memorandum or articles of association, including a change in the company’s registered name or objects.
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Appointing or removing a director before their term is due, especially in cases of misconduct or a boardroom dispute.
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Approving related-party transactions or borrowings that cross the usual thresholds.
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Clearing a merger, demerger or a scheme of arrangement that needs shareholder sign-off.
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Raising authorised share capital, issuing fresh shares or approving a buyback.
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Resolving an unexpected legal or governance crisis that cannot be deferred, such as a fraud investigation or a hostile move by a shareholder group.
Also Read About: How to Read a Company’s Annual Report?
Who can Call an EGM?
The Companies Act, 2013 gives four distinct routes for convening an EGM, each meant for a different situation.
1. The Board of Directors
The Board can call an EGM on its own motion at any time it considers necessary, without waiting for a member request.
2. By Requisitionists (Shareholders) Themselves
If the Board fails to call an EGM within 21 days from receiving a valid requisition (to be held within 45 days), the members who made the requisition (holding at least 10% voting power) can call and hold the meeting themselves.
3. Requisitioning Shareholders
Members holding at least one-tenth of the paid-up share capital carrying voting rights (or one-tenth of total voting power in a company without share capital) can submit a written requisition.
The Board must act on it within 21 days of receipt, and the meeting must be held within 45 days of the requisition. If the Board fails to do so, the requisitionists can convene the EGM themselves within three months, and the company bears their reasonable expenses.
4. The National Company Law Tribunal (NCLT)
Where calling or holding a meeting in the usual manner is impracticable (for instance, a complete deadlock between shareholder groups), the NCLT can step in on an application by a director or member and direct that a meeting be held, even ordering that a single member present will count as quorum.
Procedure for Convening an EGM
Once the decision to hold an EGM is made, the company must follow a defined sequence to keep the meeting legally valid.
Step 1: Board Approval and Requisition Check
The Board passes a resolution to call the EGM or verifies that a shareholder requisition meets the one-tenth threshold and is properly signed and deposited at the registered office.
Step 2: Notice of 21 Clear Days
Notice must reach every member, director and auditor at least 21 clear days before the meeting, by post, hand delivery or electronic mode. “Clear days” excludes both the day of dispatch and the day of the meeting. This requirement can be waived only with the consent of members holding at least 95% of the voting rights entitled to vote.
Step 3: Explanatory Statement
EGM requires an explanatory statement for every item of special business, setting out the material facts, the interest of any director or key managerial personnel, and enough context for members to cast an informed vote.
Step 4: Quorum
A meeting cannot proceed without the minimum number of members physically or virtually present as shown below:
| Type of Company | Quorum Required |
| Private company | 2 members present |
| Public company - up to 1,000 members | 5 members present |
| Public company - 1,001 to 5,000 members | 15 members present |
| Public company - over 5,000 members | 30 members present |
If quorum is not met within half an hour of the scheduled time, the meeting typically stands adjourned to the same day the following week, unless the articles state otherwise.
Step 5: Voting and Resolution
Members vote by show of hands, poll or remote e-voting, depending on the class of company. Listed companies and those with 1,000 or more members must offer remote e-voting. Depending on the matter, the resolution passed is either an ordinary resolution (simple majority) or a special resolution (at least 75% approval).
Step 6: Minutes and Regulatory Filing
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Minutes: The company must record and sign the official meeting minutes within 30 days of the EGM's conclusion (Section 118 of the Companies Act, 2013).
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ROC Filing: Resolutions passed at the EGM (such as Special Resolutions via Form MGT-14) must be filed with the Registrar of Companies (RoC) within 30 days.
Stock Exchange Disclosures (Listed Entities):
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Proceedings Outcome: A listed entity must disclose a summary of the EGM proceedings to the stock exchange within 12 hours of the meeting's conclusion (Regulation 30, SEBI LODR).
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Voting Results: Detailed voting results and the Scrutinizer’s Report must be submitted within 2 working days of the meeting's conclusion (Regulation 44(3), SEBI LODR).
Where and How can an EGM be Held?
Under Section 100 of the Companies Act, 2013, an Extraordinary General Meeting (EGM) must be held at a place within India. However, the law provides key exceptions for holding an EGM outside India:
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Wholly Owned Subsidiaries of Foreign Companies: The Board of Directors of a wholly owned subsidiary incorporated in India by a foreign company may convene its EGM outside India.
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Specified IFSC Companies: The Ministry of Corporate Affairs (MCA) exempts Specified IFSC Public and Private Companies (e.g., in GIFT City), allowing them to hold EGMs outside India, provided consent is obtained from all shareholders.
Participation via Electronic Means:
Directors and shareholders can participate through Video Conferencing (VC) or Other Audio-Visual Means (OAVM). Such participation is counted toward the quorum, making it easier for geographically dispersed shareholder bases to attend and vote.
Impact of an EGM on Shareholders and Investors
For an investor, a company calling an EGM is a signal worth reading closely. It often points to a material development that can move the stock price well before the next earnings update.
Tracking EGM notices on stock exchange filings or on the company's investor relations page helps shareholders vote on resolutions that directly affect their ownership, control and the value of their holding. Even investors who cannot attend can exercise their say through proxies or remote e-voting.
Conclusion
An EGM gives shareholders a voice when a company cannot afford to wait. From boardroom changes to mergers and capital decisions, EGMs keep major corporate actions tied to shareholder consent rather than leaving them solely to management discretion.
Knowing who can call one, the notice and quorum rules, and how resolutions are passed helps investors read these events correctly instead of treating them as routine paperwork. The next time a company you have invested in announces an EGM, you will know exactly why it matters and what to watch for.
