Download free eBooks at bookbooncom BUSINESS ORGANISATIONS AND AGENCY MEMBERS

Download free ebooks at bookbooncom business

This preview shows page 93 - 96 out of 250 pages.

Download free eBooks at bookboon.com
Image of page 93

Subscribe to view the full document.

BUSINESS ORGANISATIONS AND AGENCY MEMBERS’ POWERS AND THE PROTECTION OF MINORITIES 417 That there has been a fraud on the company or the minority. Fraud includes any act done in bad faith and against the interest of the company. Thus, any act by majority shareholders calculated to oppress the minority or defraud the company would be regarded as fraud entitling minority shareholders to bring an action. Misappropriation of corporate assets or opportunity by majority shareholders or directors may also be regarded as fraud on the company and the minority shareholders. Breach of directors’ duties could also amount to fraud on the company and minority. Below are some examples of fraud on the company or minority: Cook v Deeks [ 1916 ] 1 AC 554 – Directors used their position to obtain a contract which the company would have obtained. They then used their majority votes in the company to pass a resolution that the company was not interested in the contract. It was held that a fraud had been done on the minority and the directors liable to account. Daniels v Daniels [ 1978 ] Ch 406 – Directors of a company sold the company’s properties to one of themselves at a gross undervalue. That director later re-sold the property at a huge profit. It was held that a shareholder could sue to bring the directors to account since they have used their position to benefit themselves to the detriment of the company. Download free eBooks at bookboon.com Click on the ad to read more Maersk.com/Mitas �e Graduate Programme for Engineers and Geoscientists Month 16 I was a construction supervisor in the North Sea advising and helping foremen solve problems I was a he s Real work International opportunities �ree work placements al Internationa or �ree wo I wanted real responsibili� I joined MITAS because
Image of page 94
BUSINESS ORGANISATIONS AND AGENCY 418 MEMBERS’ POWERS AND THE PROTECTION OF MINORITIES Where majority shareholders forcibly buy the shares of minority shareholders in order to force them out of the company, this will be regarded as a fraud on the minority – Browne v. British Abrasive Wheel Co. Ltd [1919] 1 Ch 290. 23.4.2 DERIVATIVE CLAIMS FOR DIRECTORS’ BREACH OF DUTY Members of a company may bring action on behalf of the company where directors have been involved in an actual or proposed act or omission involving negligence, default, breach of duty, or breach of trust – s. 260(3) CA 2006. This provision covers failure to perform duties expected of the directors, breach of any duty owed by directors including fiduciary duties and duty of care and skill. The action may be brought against a director (including shadow directors) or any other person responsible for the wrongdoing. Members may sue for wrongdoing committed while they are members or before they became members – s. 260(4).
Image of page 95

Subscribe to view the full document.

Image of page 96
  • Fall '19
  • Corporation, Managing Partner

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes