The extraordinary general meeting is a meeting of shareholders, held in public or private companies, with the purpose of deliberating on matters important to the company.
Only shareholders with voting power can order at these meetings, although the others (such as preferred shareholders , for example) can attend and exercise their right to speak.
Among some of the subjects discussed at an extraordinary general meeting are: the revision of the content of the bylaws, the mergers and mergers. In short, relevant issues that cannot be dealt with in the Ordinary General Assembly, or even wait for it.
How do Extraordinary General Meetings work?
There is no legal determination that requires companies to call shareholders to Extraordinary General Meetings. The choice depends, above all, on what was instituted as a procedure in its statute.
However, the law does determine other issues. Like the theme of meetings, for example.
All sessions must be carefully managed so that they do not deliberate on matters restricted to the Ordinary General Meetings. If this occurs, it can be undone.
Among the matters that can not be dealt with at the Extraordinary Meetings are:
- Monetary correction of share capital;
- The distribution of dividends;
- The election of administrators and members of the Fiscal Council;
- The choice of the destination of the net profit obtained;
- And the analysis of the management accounts and the financial statements.
That is, if it does not refer to any of these five issues, the deliberation is free.
If it chooses to call the shareholders, the company must be aware of its duties in this act. It will be responsible, among other obligations, for giving due notice to the summons and delimiting precisely the matter to be discussed in the session.
While this was done, in past decades, through the posting of notices on the communication murals of each organization, nowadays the internet has made it much easier to share this information.
Corporations such as Petrobrás and the Brazilian Institute of Oil, Gas and Biofuels (IBP) already make their own manuals available for each Assembly on their websites. In them, in addition to information such as date, time and subject, there are also special guides for accreditation and powers of attorney, for example.
What are the differences between the Annual General Meeting and the Extraordinary General Meeting?
The main difference between the Ordinary Assembly and the Extraordinary Assembly, besides the theme, concerns the period of execution.
While the first must be done once a year, within 4 months after the end of the fiscal year, the second does not have a certain deadline to happen. It depends on the needs of each company, remember?
It is also possible that both, Extraordinary and Ordinary Assembly, are held on the same day and time, being recorded in a single minute and thus avoiding unnecessary bureaucracy.
What are the benefits of holding an Extraordinary General Meeting?
In this case, there are two perspectives that we need to consider: that of who organizes the Meeting (the company) and that of who participates (the shareholder).
From the company’s point of view, the Extraordinary Meeting is essential because it allows for urgent debate on issues, without the need to wait for specific dates defined by law.
The dynamism of this type of meeting follows the pace of organizations.
From the shareholder’s point of view, the excellence of the Extraordinary Meeting resides in the voice, that is, in the ability to actively participate in decision-making in the company in which it is a member. He is responsible (even if he is a minority shareholder) for the direction it takes and for financial performance.
More than analyzing this or approving that, the Extraordinary Meeting brings together organization and investor, through objects essential to the success of both, individually or together.