Ordinary Resolution (Kenya)

An Ordinary Resolution in Kenya records the decisions taken by a company's directors or members and authorises the resulting actions.

Section 115 of the Companies Act No. 17 of 2015 defines an ordinary resolution as a resolution passed by a simple majority of the votes cast by members of the company who are entitled to vote on the resolution. A simple majority means more than 50% of the valid votes cast — abstentions and spoilt votes are not counted as votes cast. Where voting is by a show of hands at a general meeting, each member present in person has one vote. Where voting is by poll — which any member can demand under the company constitution — each member's voting power reflects the number of shares held and the rights attached to each class of share.

The Companies Act No. 17 of 2015, Part VI, governs shareholder meetings and resolutions. Section 130 requires companies to hold an Annual General Meeting (AGM) within six months of the end of each financial year. Section 131 governs the calling of Extraordinary General Meetings (EGMs), which must be convened if shareholders holding not less than 10% of the paid-up capital request it. Section 137 of the Companies Act No. 17 of 2015 regulates notice periods — shareholders must receive at least 21 days' written notice of a meeting at which a special resolution is to be passed, and at least 14 days' notice for a meeting at which only ordinary resolutions are to be considered, unless a shorter notice period is consented to by members holding 90% of the shares carrying voting rights. Section 140 of the Companies Act No. 17 of 2015 permits written ordinary resolutions circulated to all eligible members, provided the required majority of members sign within 28 days of the circulation date.

Ordinary Resolutions in Kenya are used for a defined range of corporate actions. At the Annual General Meeting, ordinary resolutions are used to receive and adopt the financial statements prepared under the Companies Act No. 17 of 2015 and International Financial Reporting Standards (IFRS) as adopted in Kenya, to declare final dividends recommended by the board, to appoint and re-appoint directors, to appoint and fix the remuneration of the external auditors under the Accountants Act No. 15 of 2008 and supervised by the Institute of Certified Public Accountants of Kenya (ICPAK), and to authorise the board to allot shares under the thresholds set out in the company constitution. Ordinary resolutions are also used at Extraordinary General Meetings to ratify past board actions, approve related-party transactions below the special resolution threshold, and authorise the company to purchase its own shares under certain conditions.

Companies listed on the Nairobi Securities Exchange (NSE) must comply with additional requirements from the Capital Markets Authority (CMA) under the Capital Markets Act (Cap. 485A) and the CMA Regulations on approval of resolutions. Listed companies must publish resolutions in the daily newspapers and on the NSE website before and after shareholder meetings, and must file certified copies of passed resolutions with the CMA and NSE within prescribed timeframes. The Business Registration Service (BRS), operating under the State Department for Trade, administers the Companies Register in Kenya and requires certified copies of certain ordinary resolutions — particularly those authorising share allotments, director appointments, and changes to the company register — to be filed using the prescribed eCitizen portal forms.

An Ordinary Resolution under Section 115 of the Companies Act No. 17 of 2015 is required for a wide range of routine shareholder decisions in Kenyan companies.

At every Annual General Meeting, a company must pass ordinary resolutions to receive and adopt the directors' report and audited financial statements prepared under the Companies Act No. 17 of 2015 and the Accountants Act No. 15 of 2008. Shareholders of companies listed on the Nairobi Securities Exchange (NSE) must also pass an ordinary resolution to declare the final dividend recommended by the board, since dividends can only be paid after shareholder approval.

Ordinary Resolutions are required to appoint or re-appoint directors at the Annual General Meeting. Under Sections 128 and 130 of the Companies Act No. 17 of 2015, directors appointed by the board between AGMs must stand for re-election at the next AGM by ordinary resolution. Directors of listed companies serving three-year rotational terms must similarly be re-elected by ordinary resolution.

Ordinary Resolutions are required to appoint, re-appoint, and fix the remuneration of the company's external auditors. Under Section 382 of the Companies Act No. 17 of 2015, auditors are appointed by the shareholders at each AGM. The auditors must be registered public accountants holding a practising certificate issued by the Institute of Certified Public Accountants of Kenya (ICPAK) under the Accountants Act No. 15 of 2008.

Ordinary Resolutions are required to authorise the directors to allot shares under a general mandate granted at the AGM, allowing the board to issue new ordinary shares up to a stated percentage of the company's share capital (commonly 10–20%) without convening a further general meeting. This is particularly important for companies seeking to raise capital through rights issues under the Capital Markets Act (Cap. 485A) and CMA Regulations.

Ordinary Resolutions are required to ratify transactions entered into by directors that exceed their authority under the company constitution but do not require a special resolution. They are also required to approve the remuneration of directors (where required by the company constitution) and to adopt new share option scheme rules where the threshold for a special resolution is not triggered.

A Kenya Ordinary Resolution under Section 115 of the Companies Act No. 17 of 2015 must contain the following elements to be valid, binding on the company, and acceptable to the Business Registration Service (BRS), the Capital Markets Authority (CMA), the Nairobi Securities Exchange (NSE), and counterparties.

Company Identification: The full registered name of the company, its BRS Registration Number (format: PVT-XXXXXXXX for private companies or PBC-XXXXXXXX for public companies), and its registered office address as recorded at the BRS Companies Register. Any discrepancy between the name on the resolution and the BRS register will cause filing rejections.

Meeting Type and Notice: State whether the resolution is passed at an Annual General Meeting (AGM) under Section 130 of the Companies Act No. 17 of 2015 or an Extraordinary General Meeting (EGM) under Section 131. Confirm that proper notice was given to all members entitled to attend — at least 14 days' notice for ordinary resolutions (21 days if a special resolution accompanies the ordinary resolution on the agenda) under Section 137 of the Companies Act No. 17 of 2015, or confirm that members holding the required majority consented to shorter notice.

Date, Time, and Venue: The date, time, and place of the general meeting. Virtual meetings held via video conferencing platforms (Zoom, Microsoft Teams) are permissible under the Companies Act No. 17 of 2015 where the company constitution so permits, subject to all members being able to participate in real time.

Quorum: Confirmation that the quorum required by the company constitution for a general meeting was present at the commencement of the meeting. Most Kenyan private company constitutions set quorum at two members present in person or by proxy. For public companies, the default quorum under Table A of the Companies Act No. 17 of 2015 is five members or 10% of the membership, whichever is lower.

Voting Record: The number of votes cast in favour, against, and the number of abstentions for each resolution. For ordinary resolutions, a simple majority of votes cast in favour is sufficient for passage under Section 115 of the Companies Act No. 17 of 2015. Where voting is by poll, the aggregate shareholding voted in favour must represent more than 50% of the valid votes cast.

Resolution Wording: Each resolution should be clearly numbered and stated in precise terms. The resolution should begin with the words "RESOLVED as an Ordinary Resolution THAT" or "IT IS RESOLVED as an Ordinary Resolution THAT". Vague or ambiguous wording is grounds for challenge by dissenting shareholders before the High Court of Kenya.

Chairperson's Certification: The chairperson of the meeting — typically the board chairperson or a person elected by the members at the meeting — must sign the minutes incorporating the ordinary resolutions and certify that the resolutions were duly passed. Under Section 248 of the Companies Act No. 17 of 2015, signed minutes are prima facie evidence of the proceedings.

Filing Requirements: Ordinary resolutions authorising share allotments, director appointments, or other registrable actions must be filed with the BRS within the prescribed period using the eCitizen portal. Unlike special resolutions (Section 116), ordinary resolutions are not routinely filed with BRS unless they relate to a statutory notification.

Forms-legal.com provides this Kenya Ordinary Resolution template as a practical tool for Company Secretaries, directors, and legal practitioners handling general meeting administration under the Companies Act No. 17 of 2015, the CMA Regulations, and the NSE Listing Rules.