Conducting an Extraordinary General Meeting in Malaysia
Imagine holding a general meeting during COVID-19. For one, this pandemic devastated the country and affected its economy. The sales have been dropping fast and the management has to cope up with it immediately. But then, the Company’s Annual General Meeting is still 3 months later. The majority of the board members could not wait anymore and decided to call for a meeting. Such a meeting is to be considered the Extraordinary General Meeting or EGP.
What is an Extraordinary General Meeting or EGP?
An Extraordinary General Meeting or EGP is a special meeting that addresses the emergency situation of a company. It needs the attention of the Senior Executives, Board Members, and Shareholders. These are the company’s immediate concerns that would impact the performance of the company when not solved right away.
How is EGP Different From AGP?
The AGP stands for Annual General Meeting. It is set by the company once in a calendar year. The Malaysian Law requires that each company must have it. The beginning company must start its first AGP not later than 18 months after it has been initially incorporated. We will discuss a little later what does it mean by “incorporated” and The Malaysia Incorporation Fee that goes with it. The topic for AGP is broad and usually discusses business matters of the company. The EGP, on the other hand, usually addresses one immediate management concern. Those that are unimportant and can be accommodated by AGP will be transferred.
Another difference between EGP and AGP is that the former can be conducted on any day of the week and at any time of the day as the company sees fit. The latter, however, is conducted on working days and at working hours. The letter “E” on the EGP means Emergency. Therefore, it must be attended right away even if it would mean conducting the meeting on a holiday or beyond working hours.
How to Request for an EGP?
- A written request should be made by company members or shareholders. The letter should contain what are their concerns and why there is a need for an EGP. Not all the people in the company can request an EGP, but only those with either 10% of shares of the company’s stock or 10% of the total voting power.
- As soon as the Board of Directors received the request to have an EGP, it will decide when is the date, should they approve it. Part of the job of the Board of Directors is to set goals, prepare the agenda for the EGP, and send out this EGP to everybody that should be present in the meeting.
In setting goals, the Board of Directors shall decide what it wants to accomplish. The agenda should be specific, measurable, achievable, realistic, and timely.
Basically, the Board of Directors should prepare the agenda of the EGP. It must include the topics that the petitioners are requesting. The agenda should be organized as well with the most important listed on number one.
Last but not least, the agenda for the EGP should be sent out to everybody that should be present in the meeting. The Board of Directors should give specific instructions when and where the EGP will take place. They can also ask attendees to the meeting to read and gather information about the topic of their concern so they can have brainstorming during the EGP.
- If the Board Members denied the request for an EGP, the petitioners can still go on their own. They can talk and discuss with each other in a specific place and time. That is their privilege. However, they cannot make Directorial decisions.
Forming a Company in Malaysia
A while ago, we mentioned the word “incorporated.” What does it mean? Incorporating a business would mean establishing a business identity that is recognized by the state. The different persons coming together to form a company may have different properties or businesses of their own. However, when they decide to incorporate a business, the asset they invest in becomes its property. The control is now on its director.
Not all companies, especially small ones, have a director. In this case, they should appoint a nominee director who will be the custodian of the property shares. In Malaysia, this can be done by certain service providers such as 3E Accounting Services for Incorporation who has expertise in incorporation, appointing for a Nominee Director, and the Malaysia Incorporation Fee, which are the fees you need to settle in incorporating in Malaysia.