Meetings are one such arrangement where both shareholders and office bearers of the company come together to discuss business and non-business agendas. This makes sure that neither shareholders nor the office bearers make any decisions about the company by themselves, which could jeopardize the operations of the company. The Companies Act has provided regulations regarding management and arrangements in cases of Annual General Meetings (AGM), which are held at least once a year to discuss ordinary business agendas, and Extraordinary General Meetings (EGM), which are held on the requisition of members to discuss urgent matters.

What is an Annual General Meeting?

An Annual General Meeting (AGM) is an annual gathering of the company’s shareholders and board of directors. The company’s directors provide an annual report to shareholders at an AGM that details the company’s performance and strategy. AGMs are mandatory under the Companies Act, 2013 to be held to discuss annual results, the appointment of auditors, and other matters. To organize the AGM, a company must adhere to the regulations outlined in the Companies Act, 2013. Section 96 states that every company other than a one-person company shall hold a general meeting in each year in addition to any other meetings. The full form of the AGM is the Annual General Meeting. It is essential that the interval between two Annual General Meetings (AGMs) not exceed 15 months. However, it is worth noting that the initial Annual General Meeting (AGM) of a business has the flexibility to be scheduled on any day within 18 months after the firm’s incorporation. Annual General Meetings provide members with valuable insights into the company’s plan for improvement under the current rate of growth.

The Annual General Meeting (AGM) provides valuable insights into the strategic decisions and actions that have contributed to the company’s success, as well as those that have resulted in financial losses. This helps both the members and the board in determining the subsequent steps to be taken. It is important that an Annual General Meeting (AGM) be conducted exclusively on a business day. In the event that the government officially designates a public holiday on the scheduled day of the meeting, the participating members will regard it as a regular working day. However, AGM cannot be held on a national holiday. The venue for the annual general meeting may be designated as the registered office of the firm.

What is an Extraordinary General Meeting?

An Extraordinary General Meeting (EGM) is not an Annual General Meeting (AGM). EGM is held when some urgent issues arise in the company, and it requires the input of all the senior executives and the board. In the complex realm of corporate governance within India, the Companies Act, 2013, stands tall as the bedrock, delineating the legal architecture that governs the operations of companies. This comprehensive legislation lays out the principles and regulations that companies must adhere to, shaping the contours of their functioning. Central to this framework is the provision for meetings, a key arena of corporate discourse. Within this landscape, extraordinary general meetings (EGMs) emerge as a focal point, offering a specialized platform for companies to address urgent and critical matters that demand immediate attention. An Extraordinary General Meeting (EGM) is an exceptional assembly convened by a company to deliberate and decide on matters of urgency that cannot await the routine schedule of an Annual General Meeting (AGM). AGMs, which follow regular intervals, serve as forums for routine corporate activities. In contrast, EGMs are summoned on an ad hoc basis, responding to exigent circumstances that necessitate immediate attention. Unlike the more predictable and routine nature of AGMs, EGMs provide a dynamic platform for active shareholder participation in decision-making processes.

Difference between Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)