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Holding an Extraordinary General Meeting (EGM) in Malaysia

Holding an Extraordinary General Meeting (EGM) in MY

Definition of an EGM

An extraordinary general meeting (EGM) is defined as any general meeting which is not the company’s annual general meeting (AGM). Some companies refer to their EGMs as special general meetings or emergency general meetings; however, such terminology is relatively rare and infrequently used. An EGM is a shareholders’ meeting and may refer to any meeting of a company’s shareholders which is separate from its scheduled annual meeting. An EGM is utilized by a company so that the company may deal with any urgent matters which are to be discussed if these matters have arisen between annual shareholders’ meetings. EGMs often involve the discussion of company emergencies. Such emergencies may include matters such as the resolution of an important legal matter or the removal of an important company leader.

 

Example of an EGM

Extraordinary general meetings occur for a variety of reasons. One reason which may require the use of an EGM is the potential removal of one of the executives of the company. For example, a company may choose to hold an EGM if there have been claims that the chairperson or another leader of the company, may have forcibly removed another executive of the company without having a suitable reason to do so. Such an EGM may be suggested to be held by one or more shareholders who receive sufficient support for the holding of an EGM. At the conclusion of such an EGM, the chairperson whose actions are to be scrutinized may either remain in the position or be removed for misconduct.

 

Differences Between an EGM and an AGM

There are several important differences between an EGM and an AGM. These differences between an AGM and an EGM apply to all companies everywhere, not just those in Malaysia. An AGM is a meeting which is to be organized by a company during each calendar year. It is held to discuss any of various business matters. An EGM is any meeting which is not an AGM and involves the discussion of business matters that are often directly concerning the company’s management. The first AGM held by a company based in Malaysia must be held within not more than 18 months of the initial incorporation date of the company, and companies which do not adhere to this regulation or any other regulations governing AGMs in Malaysia will be suitably punished. There is no such requirement that governs the holding of EGMs in Malaysia; thus, there is also no punishment for not holding an EGM by a certain time. Both ordinary business and special business matters alike are discussed during an AGM. However, only special business matters are discussed during an EGM. An AGM may take place on any day other than a public holiday and many only occur during a company’s official business hours. Conversely, an EGM may occur on any day including public holidays. It could take place at any time during a day. In Malaysia, AGMs may be called by two or more members who collectively own at least 10% of the company’s share capital. Such members may also call for an EGM; however, if the company does not have share capital, two or more members who collectively own at least 10% of all voting rights may do so.

Regardless of whether a Malaysian company has share capital, there is no doubt that there are tremendous benefits to owning a company based there. This is where we at Paul Hype Page & Co can offer our services. We will assist you in the setup of your Malaysian company. We will aid you with every incorporation-related matter from the selection of a company name to the selection of a business entity to the opening of a corporate bank account as well as everything else to be addressed.

 

Requests for the Holding of an EGM

Before an EGM may be held by a Malaysian company, there must be an official request made. Such a request may either be made by company members and shareholders who either possess sufficient portions of the company’s share capital or voting rights. Further information about the holding of an EGM is contained in the Companies Act of 2016. Once it has been confirmed that an EGM is to be held, the members of the company’s board of directors are to provide notice that an EGM will soon be convened.

Every request to hold an EGM in Malaysia is to contain the details about the objectives of the proposed EGM. It is to be submitted in the form of a document and signed by all who requested the holding of an EGM. After the request has been submitted, the directors of the company are to make a decision which will either approve or deny the holding of the EGM. However, even if the directors choose not to approve the holding of the EGMs, the members who requested that one be held are nevertheless permitted to convene such a meeting of their own accord.

Of course, no directorial decisions of a company can be made if the company does not even have a director to begin with. Some companies in Malaysia may find themselves in such an unfortunate situation. If you own a Malaysian company, perhaps yours is one such company. Fortunately for you, if it is, we at Paul Hype Page & Co will be able to help you sort out your predicament. We do so by appointing a qualified person who will serve as your company’s nominee director. Having a nominee director will ensure that your company is compliant with all of the necessary statutory requirements which exist in Malaysia. We will also help you appoint company directors.

 

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Paul Hype Page

Website: www.paulhypepage.my

Posted on October 21, 2019 at 4:30 pm
Categories: Company Secretary Service in Malaysia

Holding an Extraordinary General Meeting (EGM) in Malaysia FAQs

Are all companies in Malaysia required to hold EGMs?

In Malaysia, there is no statutory requirement for any company to hold any extraordinary general meetings (EGMs). Only annual general meetings (AGMs) are legally required to be held according to the latest edition of Malaysia’s Companies Act.

However, this lack of legal requirement regarding EGMs might not necessarily extend to certain companies. This is the case because such companies have stipulations regarding the holding of EGMs within their company regulations or Articles of Association. Such stipulations may sometimes require the company to hold an EGM at certain points. Any such stipulations are required to be followed unless they are amended at any point. In this regard, the holding of an EGM differs from the holding of an AGM in Malaysia because a company must hold an AGM even if it not bound by stipulations contained in its Articles of Association.
The Companies Act contains further information related to the holding of AGMs and EGMs in Malaysia.

Is it easy to cancel an EGM?

The cancellation of an EGM can sometimes be difficult; however, it is not impossible by any means. A resolution passed at a meeting of the company’s board of directors which states that an extraordinary general meeting will be held may be canceled or rescinded at any time. However, it may not be canceled during the same meeting in which it is passed.

Should any other resolution be passed during a meeting of the company’s board of directors for any reason other than the holding of an EGM which the directors subsequently believe ought to be canceled, rescinded, or amended, an EGM must be held. Such an EGM may not be canceled if the directors intend to proceed with the cancellation, rescinding, or amending of the resolution in question. If any official forms related to the resolution in question have already been filed with important authorities; for example, the Companies Commission of Malaysia (SSM) or Malaysia’s Ministry of Human Resources, the next step can only be taken after the resolution has first been passed. Once it has been passed, it can then be rescinded in a subsequent EGM, and after that has been done, the authorities in question will have to be updated of the latest turn of events. Finally, another resolution must be passed at a subsequent meeting for the rescinding of the previous decision which took place during the extraordinary general meeting.

Is every employee of a company part of an EGM?

The members who made the decision to call of the EGM, as well as the directors of the company, are at liberty to select those who are to be present at the EGM. There may be as many or as few employees selected as desire. Therefore, it might be possible that every employee of a company is to attend an EGM; however, such an occurrence is extremely rare.

2 comments
Martin Chew says:

In company that with the shareholding structure of 51% and 49%, is any agenda in the EGM will be resolved as per 51% shareholder wanted as they are the majority?

Paul says:

Hello Martin,

Should any majority of shareholders agree to a particular agenda during an EGM, the agenda will be resolved in accordance with the desires of the majority of shareholders.

Please contact us if you would like further information on the details of the shareholders of any Malaysian company,

Thank you for your question.
Paul

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