From time to time, every company in Singapore will have to hold an extraordinary general meeting (EGM). EGMs have to be held to discuss major company issues which cannot be put off until the company’s annual general meeting. Thus, the existence of an EGM implies a problem to be solved immediately.

Holding an EGM in Singapore

Definition of an EGM

An extraordinary general meeting, also known as an EGM, is a meeting that is held among the official body of the members of an organization, shareholders of a company, or employees. EGMs occur at irregular times. The members and shareholders must be informed of the purpose of the extraordinary general meeting so that they will be able to attend the meeting in a position and situation where they can deliberate and exercise intelligent judgment so that none of the resolution to be passed are rendered invalid. Before the extraordinary general meeting takes place, the board of the organization will have agreed on more than one resolution that will be put to consideration before approval at the EGM. The wording of the decision is sent to the shareholders and members with a note about its importance. The reason for this is that the board is known to have a better knowledge about the situation, and the resolution is in effect for the ideal solution although it might not be the interests of shareholders and members. Usually, during an extraordinary general meeting, the chair person of the EGM reads out the resolution and recommends the resolution to those who are present in the meeting approval.The chairperson also takes questions about the decision, supervises the vote from those present, and declares the result of the vote. The rules for conductiong an extraordinary general meeting and the options involved in altering a resolution at an EGM as well as taking votes from proxies will vary depending on the type of orgranization. An extraordinary general meeting is called to handle matters having to do with the administration of a company’s affairs and requires the consent of the members involved.

In many cases, the only times that the executives and the shareholders can meet is during the company’s annual general meeting, which usually takes place at a fixed date and time. However, some situations might require shareholders and member of the board of directors to meet on short notice to deal with an urgent matter that usually concerns the management of the company. The extraordinary general meeting is an avenue to meet and deal with crucial and critical issues that arise in between or during the annual general meetings.

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An EGM is called to deal with any of the following:

  • The removal of an executive
  • A legal matter
  • Any matter that cannot be sustained until the next shareholders’ meeting

 

Extraordinary general meetings can take place on any day, including public holidays, or at any time. Extraordinary general meetings are called either by the board of directors, members, or even the court on rare occasions. Whenever it is impossible for the company to allow a major issue to go unmentioned until the next AGM to be held, the Articles of Association of the company provide an avenue for holding general meetings other that AGMs for the discussion of special business matters. Such meetings are know as extraordinary general meetings. An extraordinary general meeting of the company takes place whenever the board considers such a measure to be suitable. In a private company in Singapore, the minimum notice period for EGMs related to all resolution is 14 days. The same is true of public companies and EGMs related to ordinary resolution; however, EGMs in public companies which are related to special resolutions have a minimum notice period fo 21 days.

Regardless of when the company is to hold an EGM, many people nevertheless choose to start a company in Singapore. If such is your intent, we at Paul Hype Page & Co can be of assistance to you. We will work with you throughout the process of incorporation so that you will best understand how to set up your own Singapore company.

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Differences Between an EGM and an AGM

According to the Companies Act, every company not including one-person companies must hold an annual general meeting once every year in order to discuss matters of ordinary business. An extraordinary general meeting (EGM) is a general meeting held to discuss the matters that concern the adminsitration of the company’s affairs. Egms require the consent of the members involved.

An annual general meeting is organized by the company once every calendar year in order tto discuss and handle various business matters, while an extraordinary general meeting (EGM) is any meeting other than the annual general meeting in which issues concerning the company’s management are discussed and handled.

 

Comparison Between an Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)

  • The first annual general meeting of a company must be convened within 18 months of its incorporation, and subsequent ones are to be convened within either four or six months of the company’s financial year end, depending on whether the company is a listed company. Conversely, in the case of extraordinary general meetings (EGM), there are no such requirements.
  • Both ordinary and specific matters are handled at an AGM, while only specific matters are managed at an EGM.
  • An annual general meeting is conducted on any day other than a national holiday and only during business hours, while an Extraordinary general meeting can be carried out on any day including a public holiday and at any time during a day.
  • Shareholders, members, and auditors may call for an AGM, while directors and members may call for an EGM.

 

People Who Can Call for an EGM in Singapore

An extraordinary general meeting may be called by the following groups of people:

  • Board of directors: Whenever the board of directors considers it to be appropriate, it holds an extraordinary general meeting of the company.
  • Members: 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.
  • Court: Should calling for or conducting an EGM be found to be too difficult at any given time, the court may order a company to hold one. If there is an impasse within the company’s daily management or if the company has repeatedly failed to fulfill quorum requirements, the court will usually mandate that an EGM be called.

 

Why EGMs Are Conducted

In an extraordinary general meeting, any urgent matters concerning the administration of the company’s affairs which require the input of the members concerned are discussed. It has been specified in the Companies Act that ordinary and special resolutions alike may be used for the purposes of an EGM. There are various reasons why an EGM may have to be held at any time. EGMs also have several distinct purposes, of which some are the following:

  • Extraordinary general meetings are used to help the board know more about certain matters which are important to the company.
  • Extraordinary general meetings ensure that the company gives more information to the shareholders about the business activities in which the company is involved.
  • An extraordinary general meeting will include discussion of all relevant information to the company which may be financial or otherwise.

 

Extraordinary general meetings also include the information and facts that enable members to understand the meaning and the implications of the related matters and the scope of such business matters, allowing them to make better decisions.

 

Conclusion

All the meetings other than the ones which are annual general meetings are classified as extraordinary general meetings. The board of directors of the company has the power to call an extraordinary general meeting whenever, in its opinion, it deems fit. Extraordinary general meetings are usually held during the gap between two consecutive annual general meetings. If an urgent matter arises between the two annual general meetings, it can be handled by way of holding an extraordinary general meeting. As long as the shareholders and board of directors have given their approval, an extraordinary general meeting may be called.