It is a meeting of the shareholders, and being the most powerful body of any company, the GBM takes all the decisions regarding the working of the company. Held annually, this meeting is also called the Annual General Meeting (AGM), and discusses among other issues, the performance of the company in the previous accounting period and even finalizes the accounts. The AGM also appoints Auditors and Directors for the company, approves of the dividend declared by the company (it also has a right to lower the dividend). Statutorily, the period between two AGMs should not exceed 18 months.
The AGM has the authority to pass resolutions empowering the Board of Directors to take important decisions regarding the day-to-day working of the company. Companies often convene the GBM in between two AGMs to take important decisions. This meeting is termed as Extraordinary General Meeting (EGM). The proposal to declare a bonus or rights issue and the ratio thereof are put forward to the AGM/EGM and approved by the shareholders. In case of a rights issue, the premium of conversion, the instrument and other terms are also approved from this meeting.
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