| 2.
Extraordinary General Meeting (EGM) |
| All
general meetings other than AGMs are called EGMs. |
| The
length of notice for the convening of an EGM depends upon
the type of resolution being passed (see Technical Guideline
on Notices). |
| An
EGM must be convened if the directors of a public company
becoming aware of a 'serious loss of capital' i.e. when
the value of the company's net assets falls to 50% or
less of its called up share capital. |
| The
directors must convene the meeting within 28 days from
the day that the situation is known to a director and
the meeting must be held within 56 days of such date (s142
CA 85). |
| An
EGM may be convened or requisitioned by the following: |
| (i) |
The
Directors |
|
The
directors are normally given power in the Articles to
convene an EGM whenever they think fit. |
| (ii) |
Requisition
of members |
|
(a) |
The
directors must convene an EGM on the requisition of: |
|
|
(i) |
members
holding at the date of the deposit of the requisition
at least 10% of such paid-up capital as carries the right
to vote at general meetings; |
|
|
(ii) |
where
there is no share capital, members representing at least
10% of the total voting rights. |
|
(b) |
The
requisition must |
|
|
(i) |
state
the objects of the meeting; |
|
|
(ii) |
be
signed by the requisitionists; and |
|
|
(iii) |
be
deposited at the company's registered office. |
|
It
may consist of several similar documents each signed by
one or more requisitionists (s368(3) CA 85). |
|
(c) |
If
the directors do not convene a meeting within 21 days
after the deposit of the requisition, the requisitionists
or any of them representing more than one half of the
total voting rights of all the requisitionists may convene
a meeting, which must be held within three months after
that date (s368(4) CA 85). Any meeting convened under
this section must be convened in the same manner, as near
as possible, as one convened by the directors. |
|
(d) |
s368(8)
CA 85 provides that the directors are deemed not to have
duly convened a meeting if they convene a meeting for
a date more than 28 days after the date of the notice
convening the meeting. |
|
(e) |
Any
reasonable expenses incurred by the requisitionists because
of the directors' failure to convene a meeting are repayable
by the company, which must then retain such sums out of
any remuneration due, in respect of their services, to
the directors who were in default (s368(6) CA 85). |
| (iii) |
Requisition
of resigning auditors |
|
(a) |
If
a resigning auditor has made a statement that there are
circumstances connected with their resignation which should
they feel should be brought to the attention of the members,
they may requisition the directors to convene an EGM for
the purpose of receiving an considering such the directors
must convene an EGM on requisition by a resigning auditor,
who has made a statement of the circumstances connected
with resignation which he considers should be bought to
the attention of the company (s392A CA 85). |
|
(b) |
If
the directors do not proceed to convene a meeting within
21 days after the deposit of the requisition (such meeting
to be held within 28 days) every director who failed to
take all reasonable steps to do so is liable to a fine
(s392A(5) CA 85). |
| (iv) |
Requisition
by the Court |
| The
Court has an inherent power to direct that meetings of
the members or of a class of members shall be held. |
| The
Court also has a general statutory power, on the application
of a director or of any member entitled to attend and
vote or of its own motion, to order that a meeting shall
be convened and, may give such ancillary or consequential
directions as it sees fit (s371 CA 85). |
