AGM vs EGM: Differences Between Shareholder Meetings in Australia

If you run a company in Australia, shareholder meetings can become confusing fast. A common mistake is assuming every company must hold an annual general meeting, when many proprietary companies do not. Another is treating an extraordinary general meeting like a routine update session, without checking the constitution, notice periods or voting rules. Founders also get caught when urgent decisions are made informally, only to realise later that the approval process did not match the Corporations Act or the company’s own rules.

The practical difference in the agm vs egm question is simple: an AGM is a regular annual meeting, while an EGM is called to deal with specific business that needs shareholder approval outside the usual annual cycle. The legal detail matters, though, because the type of company, your constitution and the issue being voted on all affect what you must do. This guide explains when each meeting is used, which Australian companies need AGMs, how EGMs are typically called, and the steps to get notices, resolutions and records right before you sign a contract or spend money on company setup.

Overview

An AGM is the scheduled yearly meeting for shareholders, while an EGM is a separate meeting held when a specific issue needs shareholder approval before the next annual meeting. In Australia, the distinction matters most for public companies, companies limited by guarantee and any company whose constitution or shareholders agreement sets meeting rules beyond the default legal position.

• Check whether your company is actually required to hold an AGM under the Corporations Act 2001 (Cth) or its constitution.
• Confirm whether the decision can wait for an AGM or needs an EGM because timing is urgent.
• Review your constitution and any shareholders agreement for notice periods, quorum, voting thresholds and chairing rules.
• Work out whether the matter needs an ordinary resolution or a special resolution.
• Prepare proper notice, supporting documents and meeting minutes so the decision can be relied on later.
• Keep founder assumptions in check, informal agreement is not always enough when the law or company rules require a formal meeting.

What Agm Vs Egm Means For Australian Businesses

The core difference is that an AGM is a recurring annual meeting, while an EGM is a one-off meeting called for a particular purpose. That sounds simple, but the real issue for Australian businesses is whether a meeting is legally required at all, and if it is, which process applies.

What is an AGM?

An AGM, or annual general meeting, is the regular meeting a company holds once each year to deal with standard shareholder business. Typical AGM items include presenting financial statements, discussing company performance, appointing or re-electing directors where relevant, and giving shareholders a chance to ask questions.

In Australia, AGMs are mainly relevant to public companies. A public company must generally hold its first AGM within 18 months of registration and then at least once in each calendar year, within 5 months after the end of its financial year. Companies limited by guarantee also commonly have AGM obligations, subject to their specific legal position.

Many startups and SMEs are proprietary companies, often described as Pty Ltd companies. Most proprietary companies are not required by the Corporations Act to hold an AGM unless their constitution, shareholders agreement or other governance arrangements say they must.

What is an EGM?

An EGM, or extraordinary general meeting, is a shareholder meeting called outside the annual cycle to deal with a specific issue that cannot wait. It is not a standing yearly event. It is purpose-driven.

EGMs are commonly used when shareholders need to approve a major change, such as:

• changing the company constitution
• approving a share issue or share buy-back where shareholder approval is needed
• removing or appointing a director in circumstances requiring member action
• approving a significant transaction under the constitution or shareholders agreement
• changing the company name or business name
• winding up the company voluntarily

The label matters less than the process. Even if people call it an EGM, the legal question is whether the meeting was properly convened and whether the shareholders were given the information and voting process required under the law and the company’s internal documents.

Do all companies need both?

No. Many Australian businesses will never hold an AGM, and some may go years without needing an EGM. A small proprietary company with a handful of founders may instead use circulating resolutions or other approval methods allowed under its constitution and the Corporations Act.

This is where founders often get caught. They borrow governance language from public companies, or from UK templates, without checking whether the company structure in Australia works the same way. The result can be unnecessary meetings, invalid approvals or tension between shareholders because nobody was clear on the rules.

Why the difference matters in practice

The agm vs egm distinction affects timing, notice, scope and risk. An AGM usually follows a more regular and expected agenda. An EGM is often called because there is urgency or a dispute, which means people are more likely to challenge process errors.

If you are raising funds, changing equity arrangements, amending the constitution or approving a major founder decision, the meeting mechanics are not just admin. Investors, banks, counterparties and future buyers may later ask for evidence that the approval was valid.

When This Issue Comes Up

The agm vs egm question usually comes up when a company is making a decision that affects ownership, control or core governance. It often appears at the exact moment founders want to move quickly, which is why process mistakes happen.

During a capital raise

A fundraising round often triggers shareholder approvals. You may need to issue new shares, vary rights, update the constitution, approve drag-along or tag-along mechanics, or document a new cap table arrangement.

Before you sign a term sheet or subscription documents, check whether shareholder approval is needed and whether it can be passed by circulating resolution or needs a meeting. If the company has multiple shareholder classes, voting rights may be more complicated than expected.

When founders are restructuring ownership

Founder exits, vesting changes, buy-backs and new equity allocations can all raise meeting issues. The legal problem is not just whether everyone verbally agrees. The problem is whether the company follows the correct approval path under its constitution, shareholders agreement and the Corporations Act.

For example, if one founder is leaving and the company plans to buy back shares, there may be specific procedural requirements. If the constitution is also being amended to reflect a new ownership structure, that may require a special resolution rather than a simple majority vote.

When the company needs to change its rules

Changing a constitution is a classic EGM issue. A company may want to update rules about director appointments, pre-emptive rights, share transfers, virtual meetings or quorum requirements.

This can become urgent before you bring in investors or before you spend money on setup for a restructure. If the existing constitution no longer matches how the company actually operates, fixing it early can prevent disputes later.

When there is shareholder tension or a governance dispute

EGMs are often called when relationships are strained. A group of members may want to remove a director, challenge a decision or force a vote on a specific matter.

In that setting, notice defects, procedural shortcuts and badly drafted resolutions become much more dangerous. A process that seemed acceptable when everyone was aligned can be challenged once there is disagreement.

For public companies and not-for-profits with AGM obligations

If you operate a public company or a company limited by guarantee, AGM planning becomes part of the annual governance calendar. This is not just about booking a room or sending a calendar invite. The company may need to lay financial reports before members, address questions and satisfy statutory timing requirements.

Some businesses also need to think about hybrid or virtual meeting arrangements, especially where members are in different states. The constitution should be checked carefully to confirm whether the chosen meeting format is permitted.

Practical Steps And Common Mistakes

The safest approach is to identify the decision first, then match it to the right approval method. Too many companies start by booking a meeting and only later ask whether they needed one, what kind of resolution applies, or whether the notice was valid.

1. Confirm whether a meeting is required

Not every shareholder decision needs a physical or virtual general meeting. In some cases, proprietary companies can use a circulating resolution of members if the law and constitution allow it. In others, a formal meeting is unavoidable.

Check these sources together:

• the Corporations Act 2001 (Cth)
• your company constitution
• any shareholders agreement
• the terms of any investment documents or existing class rights

A common mistake is relying on only one of these. The constitution may allow something the law regulates more tightly, or the shareholders agreement may impose extra procedural steps between the parties.

2. Decide whether this is AGM business or EGM business

If the company is one that must hold an AGM, ask whether the matter can properly wait until that annual meeting. If the issue is urgent or outside normal annual business, an EGM may be the better route.

Do not use the AGM as a catch-all for every major issue just because it is already scheduled. Shareholders should have clear notice of what will be put to them, especially if the matter could materially affect rights or control.

3. Get the notice right

Notice is one of the biggest failure points. A valid meeting notice usually needs to state the date, time, place or technology details, the general nature of the business, and the text or substance of any resolution to be considered.

Where a special resolution is proposed, the notice requirements are stricter. The wording and timing matter. If the constitution sets a longer notice period than the statutory minimum, the company should follow the longer period unless a valid shorter-notice process is available.

Include supporting materials where appropriate, such as:

• an explanatory note about why the resolution is proposed
• copies or summaries of documents shareholders are being asked to approve
• proxy forms, if proxies are permitted
• details of how members can attend and vote if the meeting is held online or as a hybrid meeting

4. Check the voting threshold

The difference between an ordinary resolution and a special resolution is crucial. Some decisions can pass with a simple majority of votes cast. Others, such as modifying the constitution, generally require a special resolution, which usually means at least 75 per cent of votes cast by members entitled to vote.

Founders sometimes assume unanimous support around the table means the paperwork can be tidied up later. That is risky. The resolution type should be identified before notice goes out, not after the vote.

5. Confirm quorum and chairing rules

A meeting can fail if there is no quorum. The constitution will often set the minimum number of members who must be present, in person or by proxy, for business to proceed.

Chairing rules matter too, especially where the vote is contentious. The chair may have powers around procedure, adjournment and voting mechanics. If the wrong person chairs the meeting, or the chair acts outside the constitution, the decision may be challenged.

6. Keep proper minutes and records

Minutes are not an afterthought. They are the company’s formal record of what was decided, who attended, whether quorum was present and how the vote was conducted.

Good records usually include:

• the signed notice of meeting
• attendance records and proxies
• the final text of each resolution
• the minutes signed in accordance with the company’s rules
• any filings or register updates required after the decision

This becomes especially important before due diligence, a sale process, an investor review or a contract review between founders.

7. Follow through after the meeting

The meeting itself is only part of the process. Some resolutions need ASIC notifications, updates to the company register, revised share certificates, changes to internal policies or new contracts reflecting the decision.

For example, if shareholders approve a change of company name, a constitution amendment or a director change, there may be additional implementation steps. If the meeting approved a share issue, the cap table, registers and investment documents should all align.

Common mistakes businesses make

The main risk is assuming that agreement equals compliance. Even where all shareholders are friendly, the company should still use the correct process.

Common mistakes include:

• holding an AGM when the company was not required to, but failing to include proper notice for the real decision being made
• calling something an EGM without checking whether a circulating resolution would have been simpler and valid
• using outdated UK or overseas templates that do not reflect Australian law
• failing to identify whether a special resolution is required
• forgetting that the constitution or shareholders agreement adds extra requirements
• not keeping minutes, proxies and supporting records
• rushing a meeting before a funding round or transaction closes

If you are unsure whether the company is a proprietary company, public company or company limited by guarantee, sort that out first. The governance answer often changes depending on business structure.

FAQs

Does every Australian company need to hold an AGM?

No. Most proprietary companies do not need to hold an AGM unless their constitution or another binding document requires it. Public companies generally do have AGM obligations under the Corporations Act.

Can a proprietary company call an EGM?

Yes. A proprietary company can hold a general meeting of members when a matter requires shareholder approval. Whether people call it an EGM matters less than whether the meeting is properly convened under the law and the company’s own rules.

What kinds of decisions usually need an EGM?

Typical examples include constitution changes, major share capital decisions, director removal by members, company name changes and other matters that need shareholder approval before the next annual cycle. The exact answer depends on the constitution, shareholders agreement and the Corporations Act.

Can shareholders approve things without a meeting?

Sometimes, yes. Some companies can use circulating resolutions or other written approval methods if their legal framework allows it. You still need to check voting thresholds, documentation and any restrictions in the constitution or shareholders agreement.

What is the difference between ordinary and special resolutions?

An ordinary resolution usually passes by a simple majority of votes cast. A special resolution usually requires at least 75 per cent of votes cast and is used for more significant decisions, such as changing the constitution.

Key Takeaways

• An AGM is a regular annual shareholder meeting, while an EGM is a specific meeting called to deal with urgent or one-off business.
• Most Australian proprietary companies do not need to hold an AGM unless their constitution or agreements say otherwise.
• Public companies generally must hold AGMs and meet statutory timing requirements.
• Before calling any shareholder meeting, check the Corporations Act, the constitution, any shareholders agreement and the type of resolution required.
• Notice, quorum, voting thresholds, minutes and follow-up records all matter, especially before you sign a contract or raise capital.
• Informal founder agreement is not always enough if the law or your governance documents require a formal member approval process.

If your business is dealing with agm vs egm and wants help with shareholder meeting procedures, constitution changes, shareholder resolutions, or governance documents, you can reach us on 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.