A general meeting is a formal gathering of the shareholders or members of a company. It is held to discuss important matters about the company and to make key decisions. The meeting allows shareholders to stay informed, share their opinions, and vote on important issues. It is an important part of managing a company and ensures that shareholders have a say in its decisions.
There are two main types of general meetings
Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs).
An Annual General Meeting (AGM) is held once every year. In this meeting, the company presents its financial reports, such as the balance sheet and profit and loss statement. Shareholders discuss the company’s performance and may approve decisions like declaring dividends or appointing directors and auditors. The AGM helps make the company’s operations more transparent and accountable to its shareholders.
An Extraordinary General Meeting (EGM) is held when there is an urgent matter that cannot wait until the next AGM. For example, an EGM may be called to decide on mergers, acquisitions, or changes in the company’s rules. These meetings are not held regularly but only when specific issues arise.
The general meeting is governed by the company’s rules, called the articles of association, and laws like the Company Act. Shareholders must be given proper notice about the meeting, including details like the date, time, and agenda. For the meeting to proceed, a minimum number of members, called a quorum, must be present. Resolutions passed during the meeting are decided through voting.
In summary, a general meeting gives shareholders the opportunity to participate in the company’s decision-making process. It ensures that they are informed about the company’s activities and can provide input on matters that affect its operations. This makes the company more transparent, accountable, and effective in its management.