There are different rules for the protection of

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There are different rules for the protection of minority shareholders. These include the common law derivative action; derivative actions under the CA 2006; and continuing an action as a derivative claim. Others are the unfair prejudice remedy and the just and equitable winding-up. Download free eBooks at bookboon.com Click on the ad to read more
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BUSINESS ORGANISATIONS AND AGENCY 424 MEMBERS’ POWERS AND THE PROTECTION OF MINORITIES 23.6 PRACTICE QUESTIONS 1. Discuss the powers of a company’s members and their effects on the management of a company. 2. Mrs Smith holds 10% of the shares in Trans Co Ltd. and has been a director of the company for three years. The other directors who own majority of the shares have now removed her from the board because she disagrees with them at board meetings. Mrs Smith claims the directors now pay themselves excessive salaries and buy for themselves luxury goods and cars while refusing to pay her any dividend. She also alleges that the directors siphon the profits of the company into foreign bank accounts and have refused to present an annual account for two consecutive years. Advise Mrs Smith as to whether she has a cause of action as a minority shareholder under the common law and under the Companies’ Act 2006. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 425 COMPANY DIRECTORS 24 COMPANY DIRECTORS 24.1 INTRODUCTION Directors are responsible for managing companies and directing their day-to-affairs. These directors may be owners of the companies or only employees. In many companies, especially private ones, many directors are also their owners or shareholders. However, directors need not be members of the company they manage, a situation that is more prevalent in public companies. The position of directors is critical as a company’s well-being, success or failure may depend on it. A company director could be a natural person or a company. 24.2 LEARNING OBJECTIVES The objectives of this chapter are to enable a clear understanding of: • The meaning and types of company directors • How directors are appointed • How the tenure of directors may be ended • The powers and responsibilities of directors • The duties that directors owe to their companies • The consequences of directors’ failure to live up to their duties 24.3 WHO IS A DIRECTOR? Being a company director is not merely a matter of designation but of fact. A company director “includes any person occupying the position of director, by whatever name called” – s. 250 CA 2006 . Thus, whatever the official title or designation of a person might be, whether he is director of the company would depend on the roles he performs. By this definition, director includes de jure directors, de facto directors, and shadow directors – s. 251 CA 2006.
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  • Fall '19
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