Company Meeting : Extra - Ordinary General Meeting & Class Meeting

Extra - Ordinary General Meeting & Class Meeting:

Key Points:

1. Meaning of Extra - Ordinary General Meeting.
2. Objectives / Functions of EGM.
3. Who can call EGM?
4. Meaning of Class Meeting.
5. Objectives of Class Meeting.

Link : https://smckk14.blogspot.com/2023/06/debentures-detailed-information.html

1. Meaning of Extra - Ordinary General Meeting:

All the General Meetings other than Annual General Meeting are called as “EGM”.

A company may call EGM at any time. EGM, are called to transact such businesses for whom, it is not possible for the company to wait for next AGM. e.g. Alteration in MOA and AOA, Issue of debentures, Change in share capital, removal of any director till completion of his tenure etc.

2. Objectives / Functions of EGM:

In case of need, EGM can be called many times in a year. All the businesses transacted in EGM are called Special Business. Generally, an EGM is called to perform following works –

(i) Alteration in MOA and AOA.
(ii) Change in share capital.
(iii) Issue of share at discount.
(iv) Issue of debentures.
(v) Transfer of registered office from one state to other state.
(vi) Increase in remuneration of directors.
(vii) Deliberation on amalgamation, absorption and liquidation of company.
(viii) Sanction of loans to directors.
(ix) Any other work in which consent of members is necessary.

3. Who can call EGM?

(1) By Board of Directors:

(i) By Passing Motion and

(ii) By Directors, on demand (requisition) of members.

(2) By the members demanding for.

(3) By Tribunal (companies 2nd amendment) Act, 2002

Court word replaced by Tribunal.

(1) By Board of Directors:

(i) By Passing on Motion - The Board of Directors, under provisions of AOA, are entitled to call EGM at any time by passing necessary resolution /motion. So, it is essential for directors to call EGM to pass resolution in this regard in its meeting.

(ii) By Directors on Requisition of Members - Members of the company have right to call EGM. Directors are bound to call EGM on requisition of members. EGM maybe called by following members –

(a) In case of company having share capital, who have 1/10 th holding of paid up capital, has power to vote on the date when they demand for it.

(b) In case of company having no share capital, who have 1/10 of total voting rights, on the date when they demand for EGM.

Such requisition made by members must be in writing with the objective. The requisition should be signed by members and should be submitted in registered office. Board of Directors should invite the process to call EGM within 21 days receiving requisition and the EGM should be convened within 45 days.

(2) By the Requisitionist Members - If the Board of Director does not convene meeting within 45 days, the requisitionist members may call the meeting themselves within 3 month. The meeting will be called in such a manner as it would have been called by Board of Directors. Reasonable expenses made by members to convene the meeting, shall be paid by the company and the company will recover this amount of expenses from the amount payable to defaulting directors.

In case of joint shareholders, all the shareholders need not to sign. Anyone or some of them may sign.

(3) By Tribunal –

If for any reason, it is impracticable to call a meeting of a company, other than AGM, in any manner in which meetings maybe called, or to hold or conduct the meeting in the manner prescribed by this Act or AOA, the Tribunal may, either suo moto or an application of any director or member of the company who would be entitled to vote at the meeting in the manner it thinks fit.

If the Board of Directors, under instructions of NCLT, may issue the directive that in such meeting. Only one member or his /her proxy may present, the meeting should be considered legal.

The EGM called by NCLT, shall be considered valid for all the objectives of the company.

Class Meeting:

4. Meaning of Class Meeting:

"Class Meetings" are one of the types of General Meeting. “Class Meeting” is meant by the meeting of shareholders of a certain class. Such meeting are conducted by the company for certain class of shareholders.

5. Objectives of Class Meeting:

Generally, these meetings are called for following objectives –

(i) Alteration in rights of shareholders.

(ii) Discussion on any planning or agreement between company and members.

In such meeting, only those members may present, for which class, the meeting has been called.

The fact to be noted that if company wants to change the rights of the shareholders of any specific class, ¾ th majority should approve supported by special resolution.

But, if at least 10% of shareholders, who opposed the change, may file a suit in the court to cancel such change. The application in the court must be filed within 21 days. Court may pass an order in favour of, or may cancel the change.