Company Law shareholder's rights - Essay Example

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Company Law shareholder's rights

According to Lord Sainsbury, the Act has four key objectives:
It cannot be gainsaid that minority shareholders occupy a vulnerable and precarious position in the hierarchy of the corporate structure. The dilemma that of how one is to go about preserving their rights and granting them protections is akin to the dilemma that faces a democratic polity: while the will of the majority is a foremost consideration and indeed is the most equitable way to resolve disputes and frame policies, there is an equally compelling and equally valid need to have regard for the interests of those in the minority - marginalized sectors who face constant threat of being disenfranchised in a system founded on justice and fairness.
The part of the Act that is most relevant to shareholder engagement is Part 11, which provides shareholders with, as stated in paragraph 480 of the Explanatory Notes, "a new procedure for bringing such an action which set down criteria for the court distilled from the Foss v Harbottle jurisprudence". 2
The Act essentially expands the existing derivative action, and allows shareholders to sue the directors for a wi ...Show more

Summary

Critically evaluate the purposes underlying the UK's Review of Company Law. Do you consider that the end result, in the form of the Companies Act 2006, provides an appropriate model for other countries to follow
The major purposes underlying the UK's Review of Company Law is to protect shareholder rights, to ensure directors' responsibility, to promote corporate governance - all of which will, in the end, facilitate a better policy environment for commerce and trade…
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Company Law shareholder's rights essay example
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