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.
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The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on minority shareholder remedies, which provide some limited protection or avenues of redress for a shareholder with grievances concerning the actions of the company, directors, or majority shareholders. The chapter explores, in particular: the rule in Foss v Harbottle; derivative claims; personal claims and the issue of reflective loss; the ‘unfair prejudice’ remedy in Companies Act 2006, s. 994; and petitions to wind up the company on the ‘just and equitable’ ground under Insolvency Act 1986, s. 122(1)(g).
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The most important shareholder remedy in practice is the ability of a member to petition for relief on the ground that the affairs of the company are being or have been conducted in a manner which is unfairly prejudicial to the interests of members generally, or of some part of its members under Companies Act 2006 (CA 2006), s. 994. This chapter examines the unfairly prejudicial remedy in detail. The discussions cover petitioning on the grounds of unfair prejudice; the boundaries to unfairly prejudicial conduct; the court's power to grant relief; and petitioning for a winding-up order on the just and equitable ground under IA 1986, s 122(1)(g).
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The most important minority shareholder remedy is the unfairly prejudicial petition under Companies Act 2006 (CA 2006), s 994. This chapter examines petitioning on the grounds of unfair prejudice; the boundaries to unfairly prejudicial conduct; the court’s power to grant relief; and petitioning for a winding-up order on the just and equitable ground under IA 1986, s 122(1)(g). The extensive case law on the section is considered in detail. The courts look to breaches of the terms on which the business should be conducted including breaches of the CA 2006, but also breaches of the agreements underlying the parties’ relationships. Such underlying commitments are most commonly found in quasi-partnerships. The chapter examines the quasi-partnership in detail. The remedy most commonly provided by the court is a purchase order and the chapter looks at the valuation issues around such orders. It also considers the alternative remedy of a winding up on the just and equitable ground.
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Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the three principal remedies provided by law to members of a company: the derivative claim under Pt 11 of the Companies Act 2006 (CA 2006); the unfair prejudice remedy under Pt 30 of the CA 2006; and the petition for winding up the company under s 122 of the Insolvency Act 1986 (IA 1986).
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Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter deals with statutory remedies available to aggrieved minority shareholders, particularly their right to seek relief through a winding-up order on the just and equitable ground. It first considers the classic case of Ebrahimi v Westbourne Galleries Ltd (1973), which addressed the scope of the court’s jurisdiction under the just and equitable ground, and presents illustrations of the grounds which will support a petition under s 122(1)(g) of the Insolvency Act 1986. It also examines the issue of whether the principles promulgated in Ebrahimi extend beyond the statutory context of just and equitable winding-up by focusing on the case of Clemens v Clemens Bros Ltd (1976). In addition, the chapter gives examples of unfair prejudice, explains locus standi and procedural aspects of s 994 of the Companies Act 2006, and looks at other specific statutory rights available to aggrieved minority shareholders. Finally, it explains the Law Commission’s proposed reforms for the unfair prejudice provision.
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Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter deals with statutory remedies available to aggrieved minority shareholders, particularly their right to seek relief through a winding-up order on the just and equitable ground. It first considers the classic case of Ebrahimi v Westbourne Galleries Ltd (1973), which addressed the scope of the court’s jurisdiction under the just and equitable ground, and presents illustrations of the grounds which will support a petition under s 122(1)(g) of the Insolvency Act 1986. It also examines the issue of whether the principles promulgated in Ebrahimi extend beyond the statutory context of just and equitable winding-up. In addition, the chapter discusses the elements of unfair prejudice; explains locus standi and procedural aspects of s 994 of the Companies Act 2006 together with the remedies contained in s 996; it also considers other specific statutory rights available to aggrieved minority shareholders. Finally, it explains the Law Commission’s proposed reforms for the unfair prejudice provision.
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Where a company has a controlling or a small group of controlling shareholders, the non-controlling shareholders are at risk that the controllers will extract private benefits of control at the expense of the non-controllers. UK company law contains a wide range of techniques for addressing this issue, some more effective than others. This chapter begins by examining the various ways in which well-advised investors can contract for protection before they enter the company and how the law protects the agreements reached. The second part discusses rights to exit the company upon the occurrence of certain events. The third part discusses disclosure rights, designed to bring self-dealing transactions into the open. The fourth focuses on ways of structuring the board or shareholder body when the decision before it carries a high risk of self-dealing. The final part considers cases where the courts review the substantive fairness of the controllers’ conduct, notably, but not only, the provisions on ‘unfair prejudice.
