Sign or assemble: High-stakes difference your board is missing

Fungisai Dube

A company possesses a separate legal personality distinct from its members or shareholders. This foundational corporate principle, established in the locus classicus case of Salomon v Salomon & Co Ltd [1897] AC 22, dictates that a company must act through its directors, who are appointed in accordance with its articles.

Directors express this corporate agency through resolutions. As established in Crown & Another v Energy Resources Africa Consortium (Pvt) Ltd. & Another SC/2015, resolutions strictly define what has been authorised to be done by or on behalf of the company.

The weight of this requirement was underscored by MAKARAU J (as she then was) in Tapson Madzivire and 3 Others v Misheck Brian Zvarwadza and 2 Others HH 133/2005, where the learned judge observed: & Thus, for any acts done in the name of a company, a resolution duly passed by the Board of Directors of a company has to be produced to show that the fictional person has authorized the act.”

Failing to secure this authorisation carries severe legal consequences.

Where a director acts without a proper board resolution, their actions may be deemed null and void by the courts (see Crown & Another v Energy Resources Africa Consortium (Pvt) Ltd & Another SC 55/15. If an act is void, it is a legal nullity from the outset. This mirrors the enduring rule that & you cannot put something on nothing and expect it to stay there, established in Macfoy v United Africa Co Ltd [1961] 3 All ER 1169 and explicitly affirmed by the Supreme Court of Zimbabwe in The Trustees for the Time Being of Oliver Mandishona Chidawu Trust v Broadway

Investments (Pvt) Ltd SC 09/26.

Despite these high stakes, many directors and company secretaries in Zimbabwe treat meeting resolutions and written resolutions (round robin resolutions) as the exact same thing.

This is a serious legal error. The Companies and Other Business Entities Act [Chapter 24:31] (the COBE Act) treats them as completely separate legal tools.

Treating them interchangeably can invalidate your corporate decisions and expose directors to personal liability. Here is a straightforward guide on how these resolutions work, their similarities, differences and how abstentions affect them.

The similarity

Both instruments share the same legal purpose: they record the official decisions of the company & shareholders or directors. Once a resolution is properly passed through either method, it becomes a legally binding act of the corporate body. Both resolutions carry identical legal weight and force.

Key differences under the COBE Act

The law sets entirely different procedural paths for how these two types of resolutions must be handled:

1. Attendance and Notice

Meeting Resolutions: Require directors or shareholders to gather collectively at a specific time. The company must give formal notice days or weeks in advance and a statutory quorum must attend, depending on the type of meeting and the company structure. Notice thresholds increase significantly if a resolution requiring special notice is to be tabled. Attendance can be physical, entirely virtual, or hybrid (co-hosted virtually and physically), provided that continuous, simultaneous communication is maintained across all platforms.

Written Resolutions: Do not require any physical or virtual assembly. Instead, the process is driven directly through the text of the document:

The Proposal: Any director can propose a written resolution by submitting it to the company secretary.

The Secretarial Mandate: The company secretary is then tasked with drafting the statutory notice as specified under the COBE Act.

Circulation: The final document and notice are circulated manually, electronically, or virtually to all eligible voters. To ensure strict compliance, each director must be served personally with the materials.

2. Voting thresholds

Meeting Resolutions: Votes are calculated based only on the participants who are present and voting at the meeting. An ordinary resolution passes with a simple majority (more than 50 percent) of those voting, while a special resolution requires a 75 percent majority of those voting.

Written Resolutions: Under the COBE Act, a written resolution—whether ordinary or special—generally requires 100 percent unanimity via the signatures of all eligible directors or shareholders to take effect, unless the company’s specific Articles of Association explicitly permit an alternative threshold.

3. Legal validity

Meeting Resolutions: Valid only if the assembly adheres to statutory procedures, including proper notice, a verified quorum, and a chairperson presiding over the vote.

Once passed, the resolution becomes valid and legally binding on the exact date of the meeting, unless the company’s Articles of Association provide otherwise.

Written Resolutions: Valid only if the identical text of the document is signed by all required signatories. Unlike a meeting decision, it only becomes active and legally binding on the specific day that the final required person appends their signature manually or electronically.

4. The danger of abstentions (Not Voting)

Failing to understand how abstentions operate is where most Zimbabwean companies falter:

During a Meeting: If someone chooses to abstain, their vote is ignored. It is not counted as a “Yes” or “No”. The final decision threshold is calculated strictly from the pool of people who actually cast a vote.

In a Written Resolution: Because written resolutions generally require everyone to sign, an abstention acts as a veto. If a director refuses to sign a circulated document because they are unsure or indifferent, the resolution cannot achieve unanimity and fails. It is effectively blocked.

Best practices for your company

1. Keep Accurate Records: If you did not hold an actual meeting, do not record the decision as “Minutes of a Meeting”. Label the document clearly as a “Written Resolution”2. Review Your Articles: Check your company’s Articles of Association to see if they contain custom voting percentages or modified thresholds for written decisions.3. Meet for Difficult Decisions: If you anticipate that a director or shareholder will abstain or disagree, do not use a written resolution. Call a formal meeting instead, allowing a simple majority to carry the decision.

4. Customise Internal Governance:

Remember that directors may make any rule they think fit about how they make decisions, and how those rules are recorded or communicated, provided these internal rules do not conflict with the mandatory provisions of the COBE Act.

Read full article on www.herald.co.zw

Conclusion

Corporate governance under the COBE Act leaves no room for procedural shortcuts. While written resolutions offer an efficient alternative to formal gatherings, they demand a strict consensus that makes them vulnerable to a single passive abstention. Meeting resolutions, conversely, accommodate differing viewpoints and abstentions through democratic majority rules, though they require high administrative discipline to execute properly. By understanding these structural boundaries and tailoring your internal rules accordingly, your board can shield its corporate choices from costly compliance disputes and operational delays.

Fungisai Dube is a legal practitioner at Thompsons and is contactable by email at fungisai@ wsc.co.zw. The information contained in this article is for general informational and educational purposes only. It does not constitute legal, financial, or governance advice, nor does its publication create a lawyer-client relationship. While every effort has been made to ensure accuracy based on Zimbabwean corporate legislation and case law at the time of writing, legal frameworks evolve. Boards of directors and company secretaries should consult a registered legal practitioner or corporate governance expert for advice tailored to their specific company articles, structures, and business operations.