Difference Between Annual General Meeting (AGM) and ...

Knowing the difference between AGM and EGM will help you understand, which meeting is held by the company. An Annual General Meeting (AGM) ... Meetingofmembersshouldbeheldtotakemembersapprovalonsomebusinessmatters.Totransactordinarybusinessandthespecialbusiness(ifany)ofthecompany,theannualgeneralmeetingisheldbytheboard,whereasspecialbusinessisdiscussedintheextraordinarygeneralmeeting. Acompanyhasaseparatelegalidentitydistinctfromitsmembers,buttheyaretheoneswhoestablishthecompanyasacorporateentity.Nevertheless,thecompanyisanartificialperson,andsoitswillisexpressed,intheformofresolutionspassedatthemeetings.Therearethreetypesofabusinessmeetingconvenedbythecompany,whichareannualgeneralmeeting,extraordinarygeneralmeetingandclassmeeting. Takeareadofthisarticletounderstandthedifferencesbetweenannualgeneralmeetingadextraordinarygeneralmeeting. Content:AnnualGeneralMeeting(AGM)VsExtraordinaryGeneralMeeting(EGM) ComparisonChart Definition KeyDifferences Conclusion ComparisonChart BasisforComparisonAnnualGeneralMeeting(AGM)ExtraordinaryGeneralMeeting(EGM) MeaningAnAnnualGeneralMeeting(AGM)isthegeneralmeetingwhichmustbeheldbythecompanyeveryyear,todiscussvariousbusinessmatters.AnExtraordinaryGeneralMeeting(EGM)isanymeetingotherthantheAGMinwhichbusinessrelatingtocompany'smanagementaretransacted. FirstmeetingMustbeheldwithin9monthsoftheendofthefinancialyear.Nosuchrequirement BusinessOrdinarybusinessandspecialbusiness(ifany)istransacted.Specialbusinessonly. DayandTimeItcanbeheldonanydayexcludingnationalholiday,inbusinesshoursonly.Itcanbeheldonanydayincludingnationalholiday,andanytimeduringaday. PenaltyWhenmeetingisnotsummonedwithinthestipulatedtime,penaltyislevied.Nopenaltyisprescribedasperlaw. ConvenedbyBoardBoard,Boardonrequisitionofshareholders,requisitionistortribunal. DefinitionofAnnualGeneralMeeting(AGM) AnnualGeneralMeeting(AGM),asitsnamesuggests,isthecompany’syearlyevent,whereinmembershaveachancetotalkaboutcompany’sperformance,profitabilityanddaytodayactivities.AccordingtotheCompaniesAct,2013,everycompanynotincludingonepersoncompany,mustconveneanannualgeneralmeeting,onceinayear,todiscussmattersofordinarybusiness. Incasethecompanydoesnotconductanannualgeneralmeetinginanyfinancialyear,themembershavetherighttoapproachtheappropriateauthority,whointurngivesdirectionsforcallingtheAnnualGeneralMeetingofthecompany.TherearetwotypesofAnnualGeneralMeeting,givenasunder: FirstAnnualGeneralMeeting:Itshouldbeconvenedwithinninemonthsoftheendofthefinancialyear.Therefore,thereisnoneedtoholdanyAGMintheyearofcompany’scommencement. SubsequentAnnualGeneralMeeting:AllotherAGMafterfirstoneareknownassubsequentannualgeneralmeeting,whichistobeheldwithinsixmonthsoftheendofthefinancialyearor15monthsfromthelastAGM,whicheverisearlier. DefinitionofExtraordinaryGeneralMeeting(EGM) Anextraordinarygeneralmeetingreferstothegeneralmeetingthatisheld,totransactthemattersconcerningtheadministrationofcompany’saffairswhichrequirestheconsentofthemembersconcerned. WhenitisnotpossibleforthecompanytowaitforthenextAGM,thecompany’sarticlesofassociationprovideforholdinggeneralmeetingotherthantheAGM,totransactspecialbusinessitems,whichareknownasExtraordinaryGeneralMeeting.Itmaybecalledby: Board:Whenevertheboardconsiderssuitable,itholdsanextraordinarygeneralmeetingofthecompany. Boardontherequisitionofmembers:TheboardsummonsforanEGM,whenitreceivesrequisitionfromasufficientnumberofmembers,onthedateofreceiptoftherequisition. Requisitionist:Whentheboard,doesnotcallformeetingwithin21daysfromthedateofreceiptofvalidrequisitionwithrespecttoanymatter,therequisitionistmaycallforEGM,within45daysofsuchrequisition. Tribunal:AnEGMmayalsobecalledbythetribunalontheapplicationofanymemberordirector,whopossesstherightofcastingvotesifincaseitisnotpossibletoconvenethemember’smeeting. KeyDifferencesBetweenAnnualGeneralMeeting(AGM)andExtraordinaryGeneralMeeting(EGM) Thepointspresentedhere,explainsthedifferencesbetweenannualgeneralmeeting(AGM)andextraordinarygeneralmeeting(EGM): AnAnnualGeneralMeeting(AGM)isthemeetingwhichshouldbeorganisedbythecompanyineachcalendaryear,todiscussvariousbusinessmatters.Ontheotherextreme,anExtraordinaryGeneralMeeting(EGM)isanymeetingotherthantheAGMinwhichbusinessconcerningcompany’smanagementarediscussed. ThefirstAnnualGeneralMeeting(AGM)mustbeconvenednotmorethanninemonthsfromthecloseofthefinancialyear.Conversely,thereisnosuchrequirementinthecaseofExtraordinaryGeneralMeeting(EGM). BothordinarybusinessandspecialbusinessaretransactedatAGM,whereasonlyspecialbusinessistransactedatEGM. AnAGMshouldbeconductedonanydayotherthananationalholiday,inbusinesshoursonly.Asagainst,anEGMcanbecarriedoutonanydayincludingnationalholiday,andanytimeduringaday. WhenAnnualGeneralMeeting(AGM)isnotcalledwithinthestipulatedtime,penaltyuptoRs.1,00,000andRs.5000perdayisimposed.Incontrast,nopenaltyisprescribedasperlawfornotcallinganExtraordinaryGeneralMeeting(EGM). WhileanAGMiscalledbytheboardonly,EGMcanbesummonedbyBoard,Boardontherequisitionofshareholders,requisitionistortribunal. Conclusion 21daysclearnoticeistobegiventoeverymember,forcarryingoutthegeneralmeeting.Thesemeetingsareheldbythecompanytomakesurethatanequalandfairopportunityisprovidedtoallthemembers,toparticipateinthedecision-makingprocessofthecompany. 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