Essential Rules for Shareholder Meetings (AGM & EGM): Quorum, Location, and Timing

Introduction
Shareholder meetings—including the Annual General Meeting (AGM) and Extraordinary General Meeting (EGM)—are a cornerstone of corporate governance in Egypt. They provide shareholders with the opportunity to oversee the company’s management and major strategic decisions. The General Assembly (GA) includes all shareholders, each participating in proportion to their shareholding. For effective governance, shareholders should understand the timing, location, quorum, and voting rules that govern these critical meetings.

1. Timing and Frequency of Shareholder Meetings

Annual General Meeting (AGM)

The AGM must convene at least once per year.
It must take place within three months following the end of the company’s fiscal year.

Typical agenda items include:

Reviewing the Auditor’s report.
Approving the Board of Directors’ report and financial statements.
Approving profit distribution to shareholders and employees.
Determining Board remuneration.
Appointing the Auditor and setting fees.
Electing or dismissing Board members.

Extraordinary General Meeting (EGM)
The Board of Directors (BoD) may call an EGM whenever necessary.
An AGM or EGM must also be called if requested by:

The Auditor.
Shareholders holding at least 5% of the capital (AGM).
Shareholders holding at least 10% of the capital (EGM with serious reasons).

EGM agenda usually includes:

Amending the Articles of Association (AOA).
Increasing or reducing capital.
Extending or shortening the company’s duration.
Dissolving the company.
Changing the legal form.
Authorizing the issuance of bonds or financial instruments.

If the BoD fails to act within one month of a valid request, shareholders or the Auditor may apply to the competent administrative authority to issue the invitation.

2. Location of Meetings
The meeting location is defined in the company’s Articles of Association.
For companies registered in Egypt, meetings must take place at the company’s principal office. Any change of address must be published.
For LLCs, meetings must be held in the city or town specified in the Articles.
Modern Articles may allow meetings through video conferencing and remote participation, provided controls are clearly set.

3. Quorum Requirements and Voting

AGM Quorum (Shareholding Companies)
First Meeting: Valid only if attended by shareholders representing at least 25% of the capital. The AOA may require more (up to 50%).
Second Meeting: If quorum is not met, another meeting must be called within 30 days. It is valid regardless of shares represented.
Voting: Resolutions pass by absolute majority of represented shares, unless the AOA sets a higher percentage.

EGM Quorum (Shareholding Companies)
First Meeting: Requires shareholders representing at least 50% of the capital.
Second Meeting: Valid if attended by shareholders representing at least 25% of the capital.
EGM Voting Majorities
General Resolutions: Two-thirds (2/3) of represented shares.
Critical Resolutions: Three-quarters (3/4) of represented shares are needed for:

Increasing or reducing capital.
Early dissolution.
Changing company purpose.
Mergers or splits.

Preferred Shares: Issuing or increasing capital with preferred shares requires three-quarters (3/4) of all shares.

Shareholders holding 2% of issued capital may request agenda items.
Shareholders with 3% or more can object to GA resolutions with the administrative authority, which may suspend unfair majority decisions.

4. General Attendance Rules
All shareholders may attend personally or through a written proxy.
The AOA may restrict attendance to shareholders with a minimum number of shares if the total number is very large.
Such restrictions cannot be used to exclude minority shareholders.
Administrative regulations set procedures for invitations, attendance, voting, and relations with authorities.