28:
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We pointed out that it is inaccessible save to lawyers specialising in this field because, to obtain a proper understanding of it, it is necessary to examine numerous reported cases decided over a period of 150 years. We also explained that the procedure is lengthy and costly, involving a preliminary
155:
However, if the wrongdoing director(s) control the majority of votes they may prevent legal proceedings being brought. There are therefore exceptions to the rule which enable a minority shareholder to bring an action to enforce the company’s rights. But our provisional view was that the law relating
147:
In the consultation paper we identified two main problems. The first is the obscurity and complexity of the law relating to the ability of a shareholder to bring proceedings on behalf of his company. He may wish to do so to enforce liability for a breach by one of the directors of his duties to the
151:
Generally it is for the company itself, acting in accordance with the will of the majority of its members, to bring any such proceedings. This is as a result of principles commonly known as the rule in Foss v
Harbottle (1843) 2 Hare 461.
196:
496:
491:
235:
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held that if the claimants were a minority even after the wrongdoers were taken out of the equation, then there is no right to sue, even with a
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27:
351:
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182:
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106:. They had 14% of the company's shares, the defendants held 63%, and another shareholder, who did not want litigation, held 21%.
385:
318:
363:
271:
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The case was cited in the Law
Commission Shareholder Remedies Report in regards to the amount of court time involved:
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that shareholders cannot have a bigger right to sue than the company with its procedural and substantive limitations.
307:
339:
450:
397:
125:
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to continue the court will have regard to the majority of the minority's views has been codified in
374:
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328:
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85:
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63:
51:
223:
119:
463:
438:
419:
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77:
485:
131:
102:
174:
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prohibition (now found at section 678 of the
Companies Act 2006) and being
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Minority shareholders claimed to recover money paid away contrary to the
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case concerning derivative claims. Its principle that in allowing a
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stage which in one case took 18 days of court time to resolve.
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exception. Independence is a question of fact. He followed
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to these exceptions is rigid, old fashioned and unclear.
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42:
34:
20:
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8:
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17:
165:"Shareholder Remedies Report LC246 ss1.4"
430:
236:Southern Foundries (1926) Ltd v Shirlaw
459:
448:
7:
352:Ebrahimi v Westbourne Galleries Ltd
443:Law Commission (England and Wales)
14:
284:Estmanco v Greater London Council
260:Greenhalgh v Arderne Cinemas Ltd
497:1988 in United Kingdom case law
492:United Kingdom company case law
386:Re London School of Electronics
319:Profinance Trust SA v Gladstone
1:
439:"Shareholder Remedies Report"
364:Re Bird Precision Bellows Ltd
308:Johnson v Gore Wood & Co
272:Wallersteiner v Moir (No 2)
513:
405:
394:
382:
372:
360:
348:
340:Re Yenidje Tobacco Co Ltd
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205:Minority protection cases
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458:Cite journal requires
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445:. 11 September 1997.
296:Smith v Croft (No 2)
98:financial assistance
73:Smith v Croft (No 2)
21:Smith v Croft (No 2)
375:Insolvency Act 1986
248:Edwards v Halliwell
398:O’Neill v Phillips
329:Companies Act 2006
213:Companies Act 2006
88:, section 263(4).
86:Companies Act 2006
415:
414:
69:
68:
504:
468:
467:
461:
456:
454:
446:
435:
227:(1843) 67 ER 189
224:Foss v Harbottle
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192:
185:
176:
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129:in Lord Davey’s
120:Foss v Harbottle
82:derivative claim
64:derivative claim
43:Court membership
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18:
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126:Burland v Earle
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11:
5:
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472:
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469:
460:|journal=
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420:UK company law
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409:UK company law
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111:
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93:
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78:UK company law
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55:
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45:
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40:
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32:
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23:
22:
13:
10:
9:
6:
4:
3:
2:
509:
498:
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478:
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473:
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444:
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251:2 All ER 1064
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48:Judge sitting
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24:
19:
16:
451:cite journal
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139:Significance
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95:
76:Ch 114 is a
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71:
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15:
377:s 122(1)(g)
103:ultra vires
486:Categories
474:References
331:ss 994-996
215:ss 260-264
148:company.
343:2 Ch 426
171:See also
163:—
110:Judgment
58:Keywords
35:Citation
441:(246).
287:1 WLR 2
389:Ch 211
367:Ch 658
355:AC 360
299:Ch 114
275:QB 373
263:Ch 286
239:AC 701
115:Knox J
52:Knox J
38:Ch 114
426:Notes
132:dicta
92:Facts
464:help
407:see
488::
455::
453:}}
449:{{
466:)
462:(
198:e
191:t
184:v
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