When to Hold An Extraordinary General Meeting (EGM)

If you run a company in New Zealand, most decisions can be handled in the normal day-to-day way - a directors’ meeting, a quick shareholder chat, or a standard annual meeting.

But sometimes something urgent comes up and you need the shareholders to make a formal decision now. In practice, this is often done by calling an extraordinary general meeting (usually shortened to “EGM”).

In this guide, we’ll walk you through what an EGM is, when you might need one, and how to call and run it properly - in a practical, small-business-friendly way.

What Is An Extraordinary General Meeting (EGM)?

An “extraordinary general meeting” is a commonly used term for a meeting of a company’s shareholders that is held outside any regular cycle of shareholder meetings. (It’s worth noting that “EGM” isn’t a specific defined term in the Companies Act 1993 - the Act talks more generally about “meetings of shareholders” and the process for calling them.)

The basic idea is simple:

Shareholders are the owners of the company.
Certain decisions are “owner decisions”, not “director decisions”.
If you need shareholders to approve something urgently (or you’re required to consult them), you call a shareholders’ meeting (often referred to as an EGM).

In NZ, the rules around shareholder meetings come mainly from:

the Companies Act 1993; and
your company’s own governance documents (especially your Company Constitution, if you have one); and
any agreements between owners (often a Shareholders Agreement).

Because every company can be set up slightly differently, it’s worth checking your documents early - it can save you a lot of back-and-forth later.

EGM vs AGM: What’s The Difference?

People often compare an EGM to an AGM (annual general meeting). The difference is mostly about timing and purpose:

AGM: a regular meeting held annually (if required/used by your company) to cover standard matters like financial statements, director changes, and routine shareholder questions.
EGM: a meeting called outside the usual schedule to deal with a specific issue that can’t wait (or shouldn’t wait).

In practice, many small companies don’t hold AGMs in the “formal” way every year (and under NZ law, an AGM is not automatically required unless your constitution says it is) - but they still need a proper process when major shareholder decisions come up.

When Do You Need An Extraordinary General Meeting?

You generally need a shareholders’ meeting (often referred to as an EGM) when:

a decision must be made by shareholders (not just directors);
the company’s constitution or shareholders agreement says the decision requires a shareholder vote; or
a group of shareholders formally requests a meeting in accordance with the Companies Act 1993 (for example, the Act allows shareholders who hold at least 5% of the voting rights to require the directors to call a meeting, unless the constitution sets a lower threshold).

Here are some common real-world triggers for a shareholders’ meeting in a small business.

1) Major Changes To The Company’s Structure Or Rules

If you need to change the company’s “rulebook”, that often requires a shareholder resolution (and sometimes a special resolution). For example:

adopting, amending, or replacing a constitution (or changing key constitutional clauses);
approving significant changes to shareholder rights; or
approving transactions that your constitution/Shareholders Agreement lists as “reserved matters”.

Even where directors can handle day-to-day decisions, the “big stuff” often sits with shareholders.

2) Issuing Shares Or Changing Ownership Arrangements

Bringing in a new investor, reallocating ownership, or dealing with a shareholder exit can trigger shareholder approvals - and it’s common to formalise these decisions at a shareholders’ meeting.

For example, you might call a meeting to approve:

issuing new shares (especially if it affects existing shareholders’ percentage holdings);
a share transfer process, where approvals are required under your constitution or shareholder arrangements;
steps connected to a restructure or investor entry.

If you’re actively working through ownership changes, it can also help to understand the broader process around changing company ownership and how ownership transfers are commonly documented.

3) Appointing Or Removing Directors (In Shareholder-Controlled Situations)

Some companies allow shareholders to appoint or remove directors by shareholder resolution (sometimes this is also controlled by the constitution or shareholders agreement). If there’s a dispute, a performance issue, or the business is pivoting and needs new leadership, a shareholders’ meeting may be the cleanest way to make the change formally.

It’s also common to pair this with supporting paperwork - for example, a Directors Resolution once shareholder approval has been obtained, or where directors need to record implementing steps.

4) Approving A Big Transaction Or “Reserved Matter”

In many small businesses, shareholders want a say before the company does things like:

selling key business assets;
taking on major debt or providing guarantees;
entering into a long-term lease or committing to significant expenditure; or
changing the nature of the business.

Whether you must call a shareholders’ meeting for these decisions depends on:

what the Companies Act 1993 requires for that type of decision; and
what your constitution and Shareholders Agreement says needs shareholder approval.

5) Shareholder Disputes Or Deadlocks

If shareholders disagree and you need to put a formal resolution to a vote, a shareholders’ meeting can be part of a structured way to deal with the issue.

That said, calling a meeting in a dispute without following the correct process can backfire - especially if one side later challenges the validity of decisions made.

Who Can Call An EGM (And What Notice Do You Need)?

For small businesses, the “how do we actually call this meeting?” part is usually the most stressful.

The good news is that a shareholders’ meeting is very doable - you just need to be organised and follow the correct steps.

Who Can Call The Meeting?

Commonly, a meeting can be called by:

the board of directors; and/or
shareholders who meet the threshold to require the directors to call a meeting (under the Companies Act 1993, this is generally shareholders holding at least 5% of the voting rights, unless the constitution sets a lower threshold).

Practically, in many owner-operated companies, the directors and shareholders overlap - but it still matters that the meeting is called in the correct “capacity” and documented properly.

What Needs To Be In The Notice Of Meeting?

The notice is not just a calendar invite. It’s the document that makes the process legally sound.

Typically, your notice should cover:

the date, time, and location (or videoconference details, if allowed);
the business of the meeting (what will be voted on);
the wording of resolutions (especially if you need a special resolution);
voting instructions (including proxies, if permitted/used);
any supporting documents shareholders need to make an informed decision (for example, term sheets or key deal documents).

One practical tip: if the resolution is about ownership, have your supporting documentation lined up early - for example, your share transfer documentation. The steps around transfer shares often intersect with meeting approvals, depending on your company’s rules.

How Much Notice Is Required?

Notice periods can depend on:

the Companies Act 1993 (which sets baseline requirements - commonly, at least 10 working days notice is required unless all entitled shareholders agree to shorter notice or the constitution validly provides otherwise);
your constitution (which may modify meeting procedures in certain ways); and
whether shareholders agree to shorter notice (in some cases, unanimous agreement can allow meetings to proceed on shorter notice - but you need to be careful and document it properly).

Because getting notice wrong can put the whole meeting at risk, it’s worth getting tailored advice if the decision is high-stakes (like an investor entry, forced share sale, or director removal).

How To Run An EGM Properly (Step-By-Step)

Once you’ve decided a shareholders’ meeting is needed, your goal is to run it in a way that’s both efficient and defensible later.

Here’s a practical step-by-step framework many small NZ companies follow.

Step 1: Check Your Company Documents First

Before you draft anything, check:

your Company Constitution (meeting rules, voting thresholds, proxy rules, quorum, chairing requirements);
your Shareholders Agreement (reserved matters, veto rights, deadlock procedures, share transfer restrictions); and
any shareholder class rights (if you have different classes of shares).

This is where a lot of “quick EGMs” go wrong - people rely on what they think the rules are, instead of what the documents actually say.

Step 2: Decide What Type Of Resolution You Need

Not all resolutions are the same. Generally, you’ll see:

Ordinary resolution: usually passed by a simple majority of votes cast (common for straightforward matters, depending on your rules).
Special resolution: in NZ, this generally means approval by 75% of the votes of those entitled to vote and voting on the question (unless your constitution sets a higher threshold).

The right type of resolution matters because it affects:

the wording you must use in the notice;
the voting threshold; and
whether the decision can later be challenged as invalid.

Step 3: Prepare A Clear Agenda And Supporting Papers

EGMs are meant to deal with specific matters, so keep it tight and clear.

A typical EGM agenda might include:

Welcome and apologies
Confirm quorum
Appointment of chair (if required)
Background to the proposed resolution(s)
Discussion and questions
Voting on resolution(s)
Close

If the EGM is approving a transaction, include a short briefing note explaining:

what the company is proposing to do;
why it’s being done;
key commercial terms; and
what shareholders are being asked to approve.

Step 4: Send Notice Correctly (And Keep Proof)

Make sure you send the notice to every shareholder entitled to receive notice, in the manner required by your constitution and the Companies Act.

Keep records of:

when notice was sent;
how it was sent (email, post, etc); and
what documents were included.

This isn’t about being overly formal - it’s about protecting the company if someone later claims they weren’t properly notified.

Step 5: Hold The Meeting And Record Votes

On the day, focus on doing the basics properly:

Confirm quorum is present (or represented by proxy, if allowed).
Stick to the agenda - EGMs aren’t the time for surprise “extra” resolutions unless your rules clearly allow it.
Read the resolution(s) clearly before voting.
Record the voting outcome accurately.

If the company is implementing the shareholder decision with follow-on board actions, it can help to document those next steps cleanly with a Directors Resolution Template (especially where banks, counterparties, or regulators may later ask for evidence of authority).

Step 6: Prepare Minutes And Store Them Safely

Your minutes should record:

the date, time, and place of the meeting;
who was present (and who attended by proxy, if applicable);
that quorum was met;
the resolutions put to shareholders;
the voting results; and
any key declarations (for example, conflicts disclosed, if relevant).

Minutes are not just admin. They’re often the main evidence that a shareholder decision was properly made.

Alternatives To An EGM (And Common Mistakes To Avoid)

Not every urgent shareholder decision needs a formal sit-down meeting. Depending on your company’s setup, there may be other compliant ways to get the approval you need.

Could You Use A Written Shareholder Resolution Instead?

Many NZ companies can use a written resolution signed by the required shareholders instead of holding an in-person/virtual meeting.

This can be a great option when:

everyone agrees (or you’re close to agreement);
shareholders are in different locations/time zones; or
you want to keep the process quick and tidy.

However, written resolutions still need to be done properly - including correct wording and correct signing thresholds. For example, under the Companies Act 1993 a written resolution in lieu of a meeting generally needs to be signed by shareholders holding at least 75% of the voting rights (unless your constitution requires a higher percentage, or the particular decision requires a different threshold).

Common EGM Mistakes We See In Small Businesses

Here are some of the most common pitfalls that cause delays or legal risk later:

Using the wrong approval pathway (directors approve something that shareholders should have approved, or vice versa).
Not checking the constitution/shareholders agreement and missing special rules (like veto rights or higher voting thresholds).
Insufficient notice or sending notice to the wrong people.
Vague resolutions that don’t clearly authorise what you’re trying to do (banks and investors often won’t accept “handshake” approvals).
Poor record-keeping - no minutes, no proof of notice, no clarity on votes.
Letting a dispute drive the process - in shareholder disputes, the “process” becomes the battleground, so it needs to be watertight.

A good way to think about it is: a properly run shareholders’ meeting (including what people commonly call an EGM) is not just a formality. It’s part of your company’s legal foundation, and it’s often the paperwork trail that protects you during growth, investment, or exit.

Why Getting It Right Matters (Especially If You’re Growing)

Imagine you’re about to bring in an investor, apply for finance, or sell the business down the track. One of the first things due diligence will look for is whether the company has:

valid shareholder approvals for major decisions;
clear ownership and share records; and
consistent governance documents.

If your past decisions weren’t properly approved, it can slow the deal down or force you into messy “fix-up” documentation later - exactly when you’re trying to move fast.

Key Takeaways

An extraordinary general meeting (EGM) is the common term for a shareholders’ meeting held outside the normal schedule to approve urgent or significant decisions.
Whether you need a meeting depends on the Companies Act 1993, your constitution, and any shareholders agreement (especially for reserved matters and voting thresholds).
Common triggers include ownership changes, issuing shares, director changes, major transactions, and shareholder disputes.
To call a meeting properly, you’ll usually need clear notice (often at least 10 working days unless validly shortened), properly drafted resolutions, correct voting procedures, and accurate minutes.
Some companies can use written shareholder resolutions instead of holding a meeting, but the signing thresholds and wording still need to be followed carefully.
Getting the process right isn’t just about compliance - it protects your business during investment, growth, and exit.

If you’d like help preparing a meeting notice, drafting resolutions, or reviewing your company governance documents, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.

When To Hold An Extraordinary General Meeting (EGM) In New Zealand