KASNEB · IntermediateCompany LawBETA — flag if wrong

Company Meetings

This topic covers the types of company meetings, their procedures, and the legal requirements for conducting them.

3objectives

3revision lessons

12practice questions

What you’ll learn

Aligned to the KASNEB Company Law syllabus.

CI21.6.A Distinguish between different types of company meetings.
CI21.6.B Explain the legal requirements for convening and conducting meetings.
CI21.6.C Analyse the importance of minutes and resolutions in company meetings.

Distinguishing Types of Company Meetings in Kenya

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In Kenya, company meetings are essential for decision-making and governance within companies. The primary types of meetings recognized under the Companies Act 2015 include:

Annual General Meeting (AGM): This is a mandatory yearly gathering of a company's shareholders. It provides a platform for the directors to present the company's performance, discuss future plans, and allow shareholders to vote on key issues such as the appointment of auditors and declaration of dividends. The AGM must be held within six months of the end of the financial year.
Extraordinary General Meeting (EGM): This meeting can be called at any time to address urgent matters that cannot wait until the next AGM. An EGM can be convened by the board of directors or by shareholders holding a specified percentage of shares. Notice of the meeting must be given to all members.
Class Meetings: These are meetings held by a specific class of shareholders, such as preference shareholders. Class meetings are necessary when decisions affect the rights of that particular class, ensuring that their interests are considered.
Board Meetings: These are meetings of the board of directors to discuss and make decisions on the management of the company. Board meetings are typically held more frequently than AGMs or EGMs and are essential for day-to-day operations.
Resolutions: Resolutions can be ordinary or special. An ordinary resolution requires a simple majority to pass, while a special resolution requires at least 75% approval. Special resolutions are necessary for significant decisions such as amendments to the company’s articles of association.

Understanding these types of meetings is crucial for compliance with the Companies Act and effective corporate governance.

Key points

AGMs are mandatory yearly meetings for all shareholders.
EGMs address urgent issues before the next AGM.
Class meetings focus on specific shareholder classes.
Board meetings manage day-to-day company operations.
Ordinary resolutions need a simple majority; special resolutions need 75% approval.

More on this topic

CI21.6.B Legal Requirements for Company Meetings in KenyaBETA — flag if wrongAI 100

Company meetings must comply with the provisions of the Companies Act 2015. The key legal requirements include:

1. Notice of Meeting: A minimum of 14 days' clear notice must be given to all members entitled to attend and vote, as per Section 280 of the Companies Act. The notice must specify the date, time, venue, and agenda of the meeting.

2. Quorum: The quorum for a general meeting is stipulated in the company’s articles. For public companies, at least two members must be present in person for a valid meeting. For private companies, the quorum is typically two members present in person unless the articles specify otherwise.

3. Voting Rights: Members have the right to vote at general meetings. Each member is entitled to one vote per share held, unless the articles provide otherwise. Voting can be conducted by show of hands or by poll, as per Section 81 of the Companies Act.

4. Minutes of Meeting: Minutes must be recorded for all meetings, detailing the proceedings and resolutions passed. These must be signed by the chairman of the meeting and kept in the company’s records as required by Section 118 of the Companies Act.

5. Proxy Voting: Members may appoint proxies to attend and vote on their behalf. A proxy form must be submitted to the company at least 48 hours before the meeting, as outlined in Section 88 of the Companies Act.

Failure to adhere to these requirements can render decisions made at the meeting invalid, exposing the company to legal challenges.

CI21.6.C Importance of Minutes and Resolutions in Company MeetingsBETA — flag if wrongAI 100

Minutes and resolutions are critical components of company meetings, serving as formal records of decisions made and actions taken. According to the Companies Act 2015, every company must keep minutes of all meetings, which should be signed by the chairman of the meeting. These minutes provide legal evidence of the proceedings and decisions, ensuring transparency and accountability.

Resolutions, on the other hand, are formal expressions of the decisions made during meetings. They can be classified into ordinary resolutions, which require a simple majority, and special resolutions, which require a 75% majority as stipulated in Section 141 of the Companies Act. The type of resolution passed can significantly impact the company's operations, such as changes in share capital or alterations to the company's constitution.

The importance of minutes and resolutions includes:
1. Legal Compliance: They ensure compliance with statutory requirements under the Companies Act.
2. Reference: They serve as a reference for future meetings and decisions, aiding in continuity and consistency.
3. Protection: They protect the company and its directors by providing documented evidence of decisions made, which can be crucial in disputes or audits.
4. Stakeholder Communication: They inform shareholders and stakeholders of the decisions and direction of the company, fostering trust and engagement.
5. Governance: They enhance corporate governance by ensuring that decisions are made transparently and are documented appropriately.

Sample KASNEB-style questions

3 of 12 questions. Beta-flagged questions are AI-drafted and pending CPA review — flag anything that looks wrong.

Q1 · MCQ · easyBETA — flag if wrongAI 90

Which of the following is NOT a type of company meeting as per Kenyan company law?

A.Annual General Meeting
B.Extraordinary General Meeting
C.Board Meeting
D.Public Meeting✓ correct

Q2 · MCQ · mediumBETA — flag if wrongAI 79

What is the minimum notice period required for calling an Annual General Meeting (AGM) according to the Companies Act 2015?

A.14 days
B.21 days✓ correct
C.30 days
D.60 days

Q3 · MCQ · mediumBETA — flag if wrongAI 84

Which resolution requires a majority of at least 75% of votes cast at a company meeting?

A.Ordinary resolution
B.Special resolution✓ correct
C.Extraordinary resolution
D.Unanimous resolution

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Common questions

Distinguish between different types of company meetings.

AGMs are mandatory yearly meetings for all shareholders.

Explain the legal requirements for convening and conducting meetings.

14 days' notice required for company meetings.

Analyse the importance of minutes and resolutions in company meetings.

Minutes provide legal evidence of meeting proceedings.