This chapter discusses the different types of company meetings and how meetings are convened and managed. It examines the different types of resolutions that may be made by shareholders both at meetings and outside meetings, and the rights of shareholders to propose their own resolutions. It explains the difference between voting by a show of hands and voting by poll. It considers the protection given by law to minority shareholders. It discusses the meaning of insider dealing and market abuse and the penalties they attract. The chapter concludes with a discussion of methods by which a company can be wound up and the meaning of wrongful and fraudulent trading.
Chapter
18. Company Law III
Company Meetings, Shareholder Protection, and Liquidation of Companies
Chapter
15. Directors’ liabilities and vulnerable transactions on insolvency
This chapter considers directors’ liabilities on a company going into insolvency. Redress for breach of duty by directors is available through summary action for misfeasance (IA 1986, s 212), fraudulent trading (ss 213, 246ZA), and wrongful trading (ss 214, 246ZB). The scope of these provisions is considered in detail together with the relevant case law. Wrongful trading is potentially a valuable remedy but it is somewhat underused. It may be advantageous instead to challenge certain transactions by the directors prior to insolvency; for example, as transactions at an undervalue (s 238) or preferences (s 239). More broadly, the overall conduct of the directors is reviewed in order to determine whether disqualification is appropriate on the grounds, usually, that they are unfit. All of these matters are addressed in this chapter.
Chapter
15. Directors’ liabilities and vulnerable transactions on insolvency
This chapter considers directors’ liabilities on a company going into insolvent liquidation or administration. Redress for breach of duty by directors is mainly a matter for liquidators and administrators who can pursue a variety of options. The common measures are considered in this chapter: misfeasance claims (IA 1986, s 212); claims for fraudulent trading (ss 213, 246ZA); and for wrongful trading (ss 214, 246ZB). It is possible also to challenge certain past transactions, for example, as transactions at an undervalue (s 238) or preferences (s 239). The chapter also considers the grounds for disqualifying a director which commonly is a consequence of insolvency. The case law concerning unfitness to be a director is considered and the nature of disqualification orders and undertakings is addressed as well as the scope for seeking a compensation order.
Chapter
20. Company insolvency and liquidation
This chapter deals with procedures and legislation governing the insolvency and liquidation of a company and who are qualified as insolvency practitioners. It discusses insolvency procedures such as administration, voluntary arrangement, creditors’ voluntary winding up, winding up by the court and the appointment of a provisional liquidator. It considers the effect of insolvency and liquidation procedures on floating charges, court control of insolvency and liquidation procedures, and liability for fraudulent trading and wrongful trading. The legal principles underlying disqualification orders against a company’s directors, the use of an insolvent company’s name, the order of the application of assets in liquidation and the dissolution of a company are also examined.
