Why extraordinary general meeting (EGM) matters to a first-time founder
An EGM lets a company seek shareholder approval without waiting for its annual meeting. Founders may need one for a financing, ownership change, director decision or other matter reserved for shareholders. Missing notice, voting or quorum rules can invalidate a resolution and delay a time-sensitive transaction.
Examples of extraordinary general meeting (EGM)
A company needs shareholder approval for a new share issue before funding closes in 21 days. Its directors call an EGM, circulate the proposed resolution and supporting information, and allow eligible shareholders to vote in person or by proxy. The company records the result and files any required documents after approval.
Common misunderstanding
An EGM is not an emergency board meeting. Shareholders attend and vote on matters within their authority, while directors use board meetings for board decisions. “Extraordinary” means outside the ordinary annual schedule; it does not necessarily mean the company is in crisis or that normal governance rules stop applying.
When to use it
Use an EGM when law, the company’s constitution or an investment agreement requires shareholder approval before the next annual meeting. Confirm who may call it, notice periods, quorum, voting thresholds and filing duties in the relevant jurisdiction. Routine operational choices normally belong with management or the board, not shareholders.