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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