Extraordinary General Meeting (EGM): When And How To Call One

Running a startup or small business usually means you’re focused on product, customers and growth.

But there are moments where you have to pause and deal with the “company governance” side of things - especially when you need shareholder approval quickly, or when the decision is too important (or required) to leave to the directors alone.

That’s where an extraordinary general meeting (often called an EGM) can come in.

In this guide, we’ll break down what an extraordinary general meeting is, when you might need one, how to run it properly, and the common traps we see startups and SMEs fall into (especially when things are moving fast, like during a funding round or co-founder exit).

What Is An Extraordinary General Meeting (EGM)?

An extraordinary general meeting is essentially a general meeting of shareholders that is held outside your company’s usual meeting timetable.

In practical terms, an EGM is how your company gets shareholder decisions made when:

• the decision can’t wait, or
• the decision is significant enough (or legally reserved) that it should be put to shareholders, not just the board.

Shareholder decisions at an EGM are usually made through resolutions (votes). Depending on the decision, you may need either an ordinary resolution or a special resolution - and that difference matters a lot for validity and record-keeping.

If you want a deeper legal explainer, what people commonly call an extraordinary general meeting is closely tied to your company’s constitution and the Corporations Act 2001 (Cth) rules around general meetings.

EGM vs Board Meeting: What’s The Difference?

This is one of the most common points of confusion.

• Board meeting: directors make decisions as the company’s managers (for example, approving budgets, hiring senior staff, signing contracts).
• Extraordinary general meeting: shareholders vote on decisions reserved for members (for example, changing the constitution, approving certain capital changes, or removing a director).

It also helps to be clear about roles in your business. Many founders wear multiple hats (director + shareholder), but they’re not the same thing legally - see director vs shareholder for a clear breakdown.

When Do Startups And SMEs Need An Extraordinary General Meeting?

Not every big decision requires an EGM, but many “company-changing” events do.

Here are common startup and SME situations where an extraordinary general meeting is often needed (or at least strongly recommended):

1) Changing Your Company Constitution

If you need to update your governance rules - for example, to support a capital raise, add share transfer restrictions, or modernise decision-making - shareholders typically need to approve this (often by special resolution).

This is where your Company Constitution becomes critical, because it can set extra requirements for notice, quorum, voting thresholds, proxies, and meeting procedure.

2) Issuing New Shares Or Changing Share Rights

In many companies, issuing new shares can be done by directors, but in practice (and particularly in founder-led companies), shareholder approval may still be required because:

• your constitution requires it
• your Shareholders Agreement says it needs member consent
• the issue changes voting power or economic rights (which can trigger special approvals)

If you’re raising money, it’s very common that the investors will want governance housekeeping to be done “cleanly” - including properly documented member approvals where needed.

A well-drafted Shareholders Agreement often explains how and when shareholders must be consulted and what approvals are required for key actions.

3) Removing Or Appointing A Director

When relationships are strong, board changes can feel straightforward. When there’s conflict, it can become high-stakes very quickly.

Under Australian company law, shareholders generally have the power to remove a director, but the process and notice requirements can be strict and can depend on your company type, constitution, and the Corporations Act rules (including specific procedures for director removal). In practice, this often involves calling a general meeting and following the correct notice process.

4) Approving Major Structural Changes

Depending on your structure and documents, an extraordinary general meeting might be relevant when you’re doing something like:

• restructuring (for example, new holding company arrangements)
• approving a significant related-party transaction
• approving a buyback or capital reduction
• making changes to the company’s name or share classes

As your business grows, you’ll often find that “what’s legally required” and “what’s commercially expected” can diverge - and your investors, bank, or potential buyer may expect formal shareholder approvals even if a technical workaround exists.

Who Can Call An Extraordinary General Meeting In Australia?

Who can call an extraordinary general meeting depends on your company type, your constitution, and what the Corporations Act requires for general meetings.

In many cases:

• Directors can call a general meeting (including an EGM) if they decide it’s needed.
• Shareholders with a sufficient percentage of votes can usually require directors to call a meeting (this is often used when there’s a dispute or a deadlock).

Even if you’re a founder with majority control, it’s important not to treat an EGM as a “formality you can shortcut”. If the meeting wasn’t called correctly, the resolutions passed can be challenged - and that can create serious problems later, especially during due diligence for an investment or sale.

What If You’re A Sole Director And Sole Shareholder?

Many early-stage companies have a simple structure - one founder as sole director and sole shareholder.

In those cases, you may be able to make decisions without physically “holding” a meeting, provided the decision is properly documented as a resolution.

If you’re in that scenario, a sole director resolution can be a practical way to document decisions in a compliant way.

How To Run An Extraordinary General Meeting (Step-By-Step)

If you want your extraordinary general meeting to be valid and future-proof (for investors, auditors, banks and buyers), treat it like a process - not just an email chain.

Here’s a practical step-by-step approach.

Step 1: Identify What Decision You’re Making (And What Type Of Resolution You Need)

The first step is to clearly identify:

• what decision is being put to shareholders
• whether it requires an ordinary resolution or a special resolution
• whether any additional requirements apply under your constitution or Shareholders Agreement

As a general rule:

• Ordinary resolution = usually a simple majority (more than 50%).
• Special resolution = usually a higher threshold (commonly 75%).

This distinction comes up all the time in startup governance, especially where you’re changing constitutional rules, share rights, or taking major actions that affect ownership.

If you want to understand the difference clearly, ordinary vs special resolutions is a helpful reference point.

Step 2: Check Your Company Constitution (And Any Shareholders Agreement)

Before sending notice, check your governing documents for:

• minimum notice periods
• quorum requirements (the minimum number of members needed to validly hold the meeting)
• proxy rules (whether shareholders can appoint someone else to attend and vote)
• rules for using technology (online meetings, hybrid meetings)
• how votes are counted (show of hands vs poll)

For startups, your constitution is often a “set and forget” document - until you suddenly need it. If it hasn’t been updated since incorporation, it may not match how you operate now (multiple founders, different share classes, investor rights, etc.).

Step 3: Prepare The Notice Of Meeting And Agenda

Your notice of meeting should clearly set out:

• the date, time and place (or online meeting details)
• the business to be considered (agenda items)
• the proposed resolutions (ideally in full wording)
• any explanatory notes needed for members to understand what they’re voting on
• proxy information (if applicable)

A common mistake we see is vague agenda wording like “General business” when what you really want is approval for something significant. If the notice doesn’t properly describe the resolution, you can end up with a decision that’s vulnerable to challenge.

Step 4: Send Notice Properly (And Give Enough Time)

How you send notice matters, and so does timing.

You’ll need to consider:

• who must receive notice (all shareholders, and sometimes others depending on the company and circumstances)
• how notice can be served (email, post, or as set out in your constitution)
• the minimum notice period required

If you have overseas shareholders or complicated cap tables, it’s worth being extra careful here - late notice or incorrect service can undermine the meeting.

Step 5: Hold The Meeting, Confirm Quorum, And Take Minutes

On the day of the extraordinary general meeting, you should:

• confirm quorum is present before business starts
• appoint a chair (if required)
• work through each resolution, allow questions, and vote correctly
• record the outcome accurately

Even if it’s just you and your co-founder in a boardroom (or on a video call), take the minutes seriously. Good meeting minutes aren’t just “admin” - they’re evidence that your company made decisions properly.

Step 6: Finalise The Paperwork After The Meeting

After the meeting, make sure you:

• finalise and sign meeting minutes
• store them with your company records
• update internal registers where needed (for example, share register or director details)
• lodge any required forms with ASIC (if the decision triggers an ASIC notification)

If the resolutions approve documents (like an updated constitution or an agreement), make sure they are executed correctly too. For companies, signing rules can be technical, particularly where directors are signing for the company - Section 127 is often relevant in practice.

Common EGM Mistakes (And How To Avoid Them)

Most EGM problems don’t happen because business owners are careless - they happen because you’re busy, moving quickly, and assuming governance will “sort itself out”.

Here are the mistakes we see most often for Australian startups and SMEs.

Using The Wrong Resolution Type

If you pass an ordinary resolution when a special resolution is required (or vice versa), you can end up with an invalid outcome.

This can come back to bite you later during:

• a funding round (investor due diligence)
• a dispute between shareholders
• a sale of the company
• bank finance applications

Not Following Your Own Constitution

Your constitution can impose stricter requirements than the default rules. If you ignore those rules (for example, about notice periods or quorum), you can create uncertainty around the validity of your EGM.

Poorly Drafted Resolutions

Resolutions should be drafted clearly enough that, months later, someone can read them and understand exactly what was approved.

For example, if your resolution is approving a share issue, it should clearly state things like:

• who the shares are issued to
• how many shares
• what class of shares
• issue price and payment terms (where relevant)

Forgetting The “Paper Trail” For Future-Proofing

A startup’s cap table can evolve quickly. If you don’t maintain a clean record of shareholder decisions, you can create avoidable friction down the track.

Think of your EGM documents as part of your company’s “legal hygiene” - the cleaner they are, the easier it is to grow, raise, or exit.

Key Takeaways

• An extraordinary general meeting (EGM) is a shareholder general meeting held outside any regular meeting timetable, to approve important decisions that can’t wait.
• Startups and SMEs often use EGMs for major governance actions like changing the constitution, issuing shares, or appointing/removing directors.
• Before calling an EGM, check your constitution and any Shareholders Agreement for rules around notice, quorum, proxies and voting.
• Make sure you use the correct resolution type (ordinary vs special), and draft resolutions clearly so your approvals stand up in due diligence.
• Good minutes and properly stored company records help protect your business, especially when investors, buyers, or lenders review your governance history.

If you’d like help preparing for an extraordinary general meeting or getting your company governance documents in order, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.