Company Law shareholders - Case Study Example

Only on StudentShare

Extract of sample
Company Law shareholders

Remedies available to Samantha are bringing action section 994 (old459) of the Companies Act meant for Minority Shareholders' petitions against the directors' misrule etc. and also a derivative action.
From time immemorial, minority shareholder has been discouraged to take action against the directors on the grounds of company being run on majority concept and on the basis of action if any should be taken only by the Company on the directors and not the shareholder in individual capacity. In Foss v Harbottle1, it was observed by the court that minority should rather take necessary action through the internal forum of company meetings. Wigram VC stated that in view of the majority rule, any unlawful conduct of the directors was capable of being ratified by the majority and that it was not possible for the court to intervene. The only exception to the rule as observed by Jenkins LJ in Edwards v Halliwell(1950)2, could be that the minority shareholder should show that the directors accused of fraud were actually in control of the company rather than merely maintaining that majority could not lawfully ratify the wrong acts of the directors.3 In Ebrahimi v Westbourne Galleries Ltd4, the minority shareholder Ebrahimi sued on the basis oppression of minority and winding up on just and equitable grounds. ...
Download paper


Samantha holding 5% of the shares in Filo Ltd as against 52% held together (26% each) by the two directors Richard Anthony and Joan, is obviously a minority shareholder in the company. Even if she garners support of other shareholders, they would still form only 48% as a minority group.
Author : bednarbrock

Related Essays

Company Law
The most appropriate remedy that Quincy should avail is the second remedy of applying for an order from the court on the ground that the company's affairs are being conducted in a manner which is 'unfairly prejudicial' under Part 30 CA 206, ss 994-998 because this remedy allows Roar to continue its business.
9 pages (2259 words) Essay
Company Law: Company Law Reform Bill
The main proposals in respect of the Directors' duties include: a statutory statement of directors' general duties; and an extended power for shareholders to sue directors for negligence and other defaults. Presently the general duties that a director owes to the company were invariably established though case law rather than statute making it difficult for such duties to be comprehended and pressed for implementation. The Bill includes a statutory statement of directors' general duties both to make the law in this area more accessible and to change the law where it no longer corresponds to...
10 pages (2510 words) Essay
Company Law, Business Law
Adam does have several options that he can choose should he decide. Adam can decide to accept the decisions of the board of directors and understand that they do not need the approval of shareholders for certain high-value transactions. The magnitude of special resolutions will determine whether the board of directors would have needed the approval of the shareholders. Further, Adam has the option as a stockholder and a member of the general public to trade his shares publicly, or he also has the option of selling his shares of the company to the majority of the shareholders who agree with the...
3 pages (753 words) Essay
Company Law liability
He manages the business individually. By passage of time the business expands and the business activities will expand. When such business expansion takes place it will become difficult for the Sole Trader to manage with the business. At this time the sole trader needs some more people to help him and share both investment and also returns of his business. This necessitates the conversion of Sole Trade to Partnership form of business where two or more people come together and enter into a deed of partnership agreeing to carry on the business jointly by investing. They share both the profits and...
15 pages (3765 words) Essay
UK Company Law Shareholders and Directors
If S has began to take less active part in the management of the company, she can be paid less than the agreed amount.
8 pages (2008 words) Essay
UK Company Law - Shareholders and Directors
Q1 In reference to the case given where J, M, D and S are equal shareholders; they all have equal responsibility to be in charge of the company. If S has began to take less active part in the management of the company, she can be paid less than the agreed amount.
8 pages (2008 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!