DERIVATIVE CLAIM AS A RIGHT OF MINORITIES 5.docx

These parties are able to look at the updated

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these parties are able to look at the updated financial records in order for them to deal with the various issues such as fraud, overspending, and ultra vires acts. Section 34-38 of the Company’s Act has duly provided for the need for companies to only execute documents with people who are purely authorized to do the same. Consequently, it is important that this information can be found within the company’s records. 107 Section 1007. 108 Section 134. See also GUTHRIEv. HARKNESS 199 U.S. 148 (1905) 109 Cockburn v. Union Bank of Louisiana, 13 La. Ann. 289, 110 Gadaffi Yohana and Tatu Miriam, ‘Derivative action under the Companies Act 2015. xxv
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In a bid to protect the rights of minorities, the company’s financial records and reports are supposed to be available to all the members. This is regardless of the class of this particular member. Section 114, expressly provides that all members have a right to receive the copies of the company’s annual financial statements. Section 115 goes ahead and provides that these members have the right to receive the copies in hard copy in instances that they have been circulated in soft copy. Since it has been provided in the Companies Act 2015, then the various players are bound to adhere to these applications by the minority shareholders. Part XXV of the Companies Act 2015 provides the various accounting records and financial statements. Section 620(2), provides the various financial records that a member is supposed to receive in instances that it is an unquoted company. These are, the company’s annual financial statement, the director’s report, and the auditor’s report on these financial statements. Section 620(3), provides the reports in instances that the company is a quoted company. These are the annual financial statement, the director’s remuneration report, the director’s report, auditor’s report on the above-mentioned financial reports. Section 620(4) further adds the financial reports; the notes to the statement, the balance sheet, and the profit and loss account. Section 2.3.1 of the Corporate Governance Guidelines that were issued by the CMA provide that it is important for all the shareholders to be part of the major decisions that the company makes. The guidelines mandate that the information should be in the form of company assets, restructuring reports, takeover, mergers, acquisition, and reorganization reports. The financial records are supposed to be able updated every year. Therefore, all the members are supposed to receive these financial records and reports on an annual basis. They may be required to apply for these records when required. Since the Act provides that these individuals are allowed to get these records, in case they see that there are some areas that they see that there are some irregularities in the report then they can take up some actions. These may include, putting the directors to strict proof or even deciding to go to court to settle the matter. The court has powers to give order of mandamus that force the directors to act within their powers. Therefore, the minority member will have a chance
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  • Winter '12
  • kariuki
  • Common Law, Companies Act 2006

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