The distinction between an ordinary and a special resolution decides how much support a decision needs and whether the Registrar has to be told. Section 64 defines both.
An ordinary resolution is “a resolution that is approved by a simple majority of the votes of those members entitled to vote and voting on the question pursuant to a procedure approved by the rules”. A special resolution is “a resolution approved by a majority of 75% (or, if a higher majority is required by the rules, that higher majority) of the votes of those members entitled to vote and voting on the question at an annual or special meeting of which not less than 21 days’ prior notice, specifying the intention to propose the resolution as a special resolution, has been duly given”.
Counting the votes
The percentage is of votes cast, not of all members; abstentions and absentees do not count against the resolution. Unless the rules provide otherwise, each member has one vote, and a membership held jointly by two people gives each of them a vote (sections 63(3), 64(1) of the Associations Incorporation Act 2023). Members participating by conference call or other remote means are present and may vote (section 65(3)). At the meeting, “unless a poll is demanded, a declaration by the chairman that the resolution has been carried is conclusive evidence of that fact” (section 64(4)), so a member who doubts the count must demand a poll before the meeting moves on.
The 21 days’ notice
The notice must be given at least 21 days before the meeting and must say that the resolution will be proposed as a special resolution. Notice is given in the manner the rules provide (Schedule item 7) and may be delivered, handed over, emailed to an address the member has given, or sent by any other means the rules permit (section 140). A resolution passed at a meeting called on shorter notice, or on notice that did not flag it as special, is an ordinary resolution at best, and if the Act required a special resolution it is ineffective.
When the Act requires a special resolution
- Adopting the rules on incorporation or re-registration (section 20(2) and (4)).
- Substituting, adopting or amending the rules, and altering the objects (sections 21(1), 62(2), 63(1)).
- Changing the name (section 17(1)).
- Winding up the association (section 62(2)(c)), subject to a rule allowing the committee to appoint a liquidator on a specified event.
- Authorising remuneration of committee members where the rules do not (section 29(b)).
- Approving disclosure or use of the association’s private information by a committee member (section 43(3)(a)).
- Amalgamating with another association (section 98).
- Authorising a person to request removal from the register (section 109(1)(a)).
- Any action the members approve by special resolution also shields them from liability as committee or shadow committee members for that action (section 48).
Appointing and removing committee members, appointing the auditor and approving a major transaction may be done by ordinary resolution unless the rules provide otherwise (sections 24(2), 25, 62(3)).
Lodging the special resolution
Section 64(5) requires notice of the passing of a special resolution to be lodged with the Registrar in the prescribed form with the prescribed fee within 20 days after it is passed, accompanied by a copy of the resolution and any other prescribed documents; “thereupon a copy of the resolution must be registered by the Registrar and, until registered, does not take effect”. Failure by the committee is an offence by every member of the committee, with a fine of up to K2,500 or two months’ imprisonment (section 64(7)). The lodgement requirement is what makes the special resolution a public act: anyone searching the register can see that the association’s rules, name or objects were changed and when.
Written resolutions in lieu of a meeting
Section 68 allows a resolution in writing, signed or assented to by or on behalf of members holding at least 75 per cent of the votes entitled to be cast (or the higher majority the rules require), to be “as valid as if it had been passed at a meeting”. No prior notice is required (section 69(2)), and the resolution may consist of several documents in similar form, including emails (section 69(1)). It too must be lodged within 20 days and does not take effect until registered (section 69(3)). Because the 75 per cent is of all votes entitled to be cast rather than of votes cast, a written resolution needs broader support than a special resolution at a meeting, but it avoids the 21-day wait. See written resolutions.
State the date, time, place and any remote access details; set out the full text of the proposed resolution; state that it will be proposed as a special resolution under section 64(3); and send it at least 21 clear days before the meeting in the manner the rules require. Keep proof of when and how it was sent, since a challenge will turn on it.
Sources
- Associations Incorporation Act 2023 — ss 17, 20, 21, 24, 25, 29, 43, 48, 62, 63, 64, 65, 68, 69, 98, 109, 140, Schedule item 7
Before relying on anything here, read the current text of the Associations Incorporation Act 2023 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.