How Do You Convene An Extraordinary General Meeting (EGM) For Your Company

What is an Extraordinary General Meeting (EGM)?

If you have incorporated a company in Singapore or planning to do so, chances are you have done or heard of Annual General Meetings (AGMs). As an exempt private company limited by shares, it is mandatory for you to convene an AGM annually within 6 months after your company’s financial year-end. But what is an Extraordinary General Meeting (EGM) and its purpose?

An EGM is necessary for shareholders’ to collectively approve important business decisions and matters. Especially so when some business decisions need to be approved before the next AGM can happen, or it might be detrimental to the business if the decision is delayed.

The agendas of EGMs can be anything ranging from the amendment of the company’s constitution, the election of new board members or issuance of new shares, and so on.

How to convene an EGM?

The directors and shareholders of a company can call for an EGM. Shareholders can call for an EGM under 2 options:

1. Any shareholders with a minimum of ten per cent (10%) of total voting shares can get the board of directors to convene an EGM; or
2. Two (2) or more shareholders holding at least ten per cent (10%) of the total number of shares issued

Singapore courts of law have the rightful authority to convene an EGM, where it is impossible to conduct a meeting in the usual manner. Some of these scenarios are:

1. Quorum requirements are not met;
2. An impasse in business decisions has occurred

A quorum is the minimum number of shareholders that must be present during the meeting, who are entitled to vote. The quorum for EGMs is usually specified in the company’s constitution. If the quorum is not specified in the company’s constitution, the mandated minimum number of members that must be present is two (2), as stipulated in section 179(1)(a) of the Companies Act.

Notification of an EGM

The company needs to give notice, in writing, of the EGM to the shareholders, in order for the EGM to be valid.

Fourteen (14) days is the minimum notice period for all meetings, AGMs and EGMs, for private companies. The same notice period is required for public companies for ordinary resolutions. However, for special resolutions, a twenty-one (21) day notice period is necessary.

A shorter notice period is possible if the majority of shareholders who hold at least ninety-five per cent (95%) of total voting rights agree.

The crucial information of the business matter to be discussed during the EGM must be provided to all parties involved. The date, time, and location of the EGM must be stated clearly in the notice. The agenda of EGM must be stated in the notice as well.

The notices can be sent by registered mail. Besides that, emails and notifications on the company’s website would suffice as well. You will have to check your company’s constitution if the use of electronic transmissions is permitted.

What happens after the EGM?

At the end of the EGM, there will be a voting outcome on the resolutions whether they have been passed or rejected. There are certain steps to take after the EGM to ensure the resolutions passed are official.

For example, if a company passes a special resolution at the EGM for voluntary winding up, a copy of the special resolution has to be lodged with the Accounting and Corporate Regulatory Authority (ACRA) in 7 days. The company must take up a publication in at least one Singapore newspaper within ten (10) days of the same resolution. After which the board of directors can appoint a liquidator to start on the voluntary winding-up proceedings.

In the course of your business, there will definitely be a time whereby you need to convene an EGM to get your shareholders to decide on the company’s matters. Therefore, it is important to keep in mind the procedures of calling for an EGM.

It may seem very confusing and cumbersome to call for an Extraordinary General Meeting. At the same time, to fulfil all the various legal requirements. If you need help or have any questions on the process of convening an EGM, you should always engage a corporate secretary to help you.

If you have any questions for us regarding how to convene an EGM, do not hesitate to contact us.

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