Understanding Company Resolutions under the Zambian Companies Act No. 10 of 2017

It is important to distinguish between an ordinary resolution, a special resolution and a written resolution. An ordinary or special resolution describes the level of member approval required for a particular decision, while a written resolution is a statutory mechanism through which members of a private company may pass a resolution without holding a meeting.

Accordingly, a written resolution should not be viewed as a separate category of resolution alongside an ordinary or special resolution. Where permitted by the Act, the written resolution procedure may be used to pass either an ordinary or a special resolution, depending on the nature of the decision and the applicable statutory requirements.

An ordinary resolution is a resolution passed by a simple majority of the votes cast by members entitled to vote at a meeting duly convened and held. A special resolution is a resolution passed by not less than 75% of the votes of members entitled to vote at a meeting duly convened and held at which the resolution is moved as a special resolution, or such higher majority as the articles of association may require.

By contrast, section 77 of the Act permits the members of a private company to pass a resolution in writing without holding a meeting. The written resolution procedure therefore provides an alternative means of obtaining member approval where the Act permits its use. For a written resolution to be valid, it must be signed by every member entitled to vote on the resolution, or by that member’s authorized representative, and it is passed when the last member entitled to sign has signed it.

The requirement for all members entitled to vote to sign a written resolution should not, however, be confused with the 75% threshold applicable to a special resolution. The fact that a written resolution requires unanimous signing does not, by itself, make the resolution a special resolution. Its classification depends on the nature of the matter being decided and, where applicable, whether the resolution is expressly required or proposed to be passed as a special resolution.

The written resolution procedure may also be relevant where a matter has initially been considered at a meeting. If the members decide not to proceed with a vote at the meeting and instead deal with the matter through the written-resolution procedure, the requirements applicable to a written resolution must be satisfied. Conversely, where a resolution has already been validly passed at a duly constituted meeting, subsequently preparing and signing a document recording that decision does not, by itself, convert the resolution into a written resolution.

The written resolution mechanism can be particularly useful for private companies because it may make corporate decision-making faster and more efficient. Instead of convening a meeting, preparing notices and conducting a formal vote, members may approve a proposed resolution in writing where the statutory and regulatory requirements are satisfied.

However, not every matter can be dealt with through the written-resolution procedure. For example, section 77 excludes certain matters, including the removal of an auditor or director, from being dealt with by written resolution.

Before preparing a resolution, the directors or company secretary should therefore consider:

• What decision is the company seeking to make?
• Does the Act prescribe a particular type of resolution?
• Can the matter be dealt with through the written resolution procedure?
• Do the company’s articles impose additional requirements?
• What voting threshold applies?
• Are there notice or procedural requirements that must be satisfied?
• Does the resolution have to be lodged with the Registrar or accompanied by another statutory filing?

Understanding these distinctions is important because the validity and effectiveness of a corporate decision may depend not only on obtaining the required level of member approval, but also on following the correct statutory procedure. In particular, recognizing that a written resolution is a procedure for passing a resolution rather than a separate category of resolution helps ensure that companies apply section 77 correctly and distinguish the procedural requirements for written resolutions from the approval thresholds applicable to ordinary and special resolutions.

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