EGM: Definition, Obligations, and Organization
Jan 25, 2024
What is an Extraordinary General Meeting?
The Extraordinary General Meeting convenes the shareholders of a company to address urgent and major concerns. It differs from the Ordinary General Meeting (OGM), which is recurring and deals with matters related to annual accounts.
What is its purpose?
The agenda of an EGM includes matters not related to the day-to-day management of the company but significant and decisive changes affecting the company or its members. The Extraordinary General Meeting allows shareholders to vote on specific resolutions such as amendments to articles of association, changes in capital, relocation of the registered office, or liquidation/dissolution of the company.
How to organize an Extraordinary General Meeting?
Convocation for the Extraordinary General Meeting
The members must be invited to attend the EGM at least 21 days before the scheduled date, by registered letter with acknowledgment of receipt. The convocation must specify the agenda, date, time, and venue of the EGM. Procedures for proxy voting should also be notified in case a shareholder cannot attend in person and wishes to be represented.
Conduct of the Extraordinary General Meeting
Once all the summoned members are present, the meeting begins. Only the topic specified in the convocation can be discussed; other topics cannot be raised during the meeting. Decisions at an EGM must be made through voting. To validate a decision, certain rules regarding a minimum number of votes in favor and a minimum number of members present must be followed.
For both a SA (public limited company) and a SARL (limited liability company), the rules are the same. Representatives holding at least one-quarter of the share capital must attend the meeting for a first discussion on a specific subject. If the same subject is discussed at a subsequent EGM, one-fifth of the share capital is required. In both cases, a two-thirds majority is needed for a resolution to be adopted.
Drafting the Minutes of the Extraordinary General Meeting
Minutes of the EGM should record the proceedings and summarize the key points discussed.
Our Advice
To properly convene an Extraordinary General Meeting and ensure the validity of discussions and decisions, seek the assistance of a chartered accountant. They can advise you on the procedures to follow and the best way to manage an EGM for your company.
