20. The derivative claim and the rule in Foss v Harbottle

Company Law ◽  
2018 ◽  
Author(s):  
Brenda Hannigan
Keyword(s):  
Majority Rule ◽  
Common Law ◽  
Company Law ◽  
Legal Personality ◽  
The Common

Shareholders' remedies are dominated by the rule in Foss v Harbottle. The rule is based on two fundamental principles of company law: respect for the separate legal personality of the company and the principle of majority rule. This chapter discusses the common law derivative claim; derivative claims under Companies Act 2006 (CA 2006), Part 11; corporate loss and reflective loss; personal actions at common law; and specific statutory rights under the CA 2006 581.

scholarly journals Transparency in corporate governance: Extent of directors duty to declare interest in company’s transactions

2015 ◽  
Vol 11 (1) ◽  
pp. 137-148 ◽  
Author(s):  
Anthony O. Nwafor
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
United Kingdom ◽  
Comparative Analysis ◽  
Common Law ◽  
Men And Women ◽  
Legal Personality ◽  
The Common ◽  
The Law ◽  
Important Position

The realization that the directors occupy important position in corporate governance, and as business men and women, cannot be prevented from having dealings with the company, demand a close scrutiny of corporate transactions in which they are directly or indirectly involved or have an interest to ensure that such interest is not placed above their duty to the company. One of the ways in which the law strives to achieve this balance is by imposing a duty on the director to disclose to the board any interest he has in company’s transactions. This requirement which was previously governed by the common law and the company’s articles, is presently increasingly finding a place in companies statutes in different jurisdictions. The paper examines, through a comparative analysis, the provisions on the duty of the director to disclose interest in company’s transactions in South Africa and United Kingdom with the aim of discovering the extent to which the statute in both jurisdictions upholds the common law prescriptions. The paper argues that the need for transparency in corporate governance and the preservation of the distinct legal personality of the company demand that the duty to disclose interest should be upheld even in those cases of companies run by a sole director.

scholarly journals The protection of environmental interests through corporate governance: A South African company law perspective

2015 ◽  
Vol 11 (2) ◽  
pp. 8-20
Author(s):  
Anthony O. Nwafor
Keyword(s):  
South Africa ◽  
Sustainable Development ◽  
Corporate Governance ◽  
South African ◽  
Common Law ◽  
Company Law ◽  
The Common ◽  
Corporate Administrators ◽  
Environmental Interests

The quest to maximize profits by corporate administrators usually leaves behind an unhealthy environment. This trend impacts negatively on long term interests of the company and retards societal sustainable development. While there are in South Africa pieces of legislation which are geared at protecting the environment, the Companies Act which is the principal legislation that regulates the operations of the company is silent on this matter. The paper argues that the common law responsibility of the directors to protect the interests of the company as presently codified by the Companies Act should be developed by the courts in South Africa, in the exercise of their powers under the Constitution, to include the interests of the environment. This would guarantee the enforcement of the environmental interests within the confines of the Companies Act as an issue of corporate governance.

scholarly journals Impact of the Constitution's Normative Framework on the Interpretation of Provisions of the Companies Act 71 of 2008

2019 ◽  
Vol 22 ◽  
pp. 1-24
Author(s):  
Christa Rautenbach ◽  
Brighton M Mupangavanhu
Keyword(s):  
Common Law ◽  
Social Science Research ◽  
Science Research ◽  
Company Law ◽  
Bill Of Rights ◽  
Commercial Law ◽  
Normative Framework ◽  
The Common ◽  
Research Questions ◽  
The Republic

Given the intention of section 7(a) of the Companies Act 71 of 2008 (the Act) to promote compliance with the Bill of Rights in the interpretation and application of company law in SA, this article assesses the extent to which the Act actually does this. The article thus seeks to showcase evidence of the Act's intentional alignment with the normative framework of the Constitution of the Republic of South Africa, 1996 (the Constitution). The paper does this by answering the question: what are the implications of the Constitution's normative framework on the interpretation and application of the Act? The term "normative framework" is defined, and a distinction is drawn between the descriptive and explanatory social science research questions and the legal research questions which are evaluative and normative in nature. The article provides examples of the contexts in which the intentional alignment of the Act with the Constitution's normative framework is evident. To this extent, commentary is made on the following selected issues: remedies to facilitate the realisation and enjoyment of rights established by company law; the direct and indirect horizontal application of the Bill of Rights to provisions of the Act; and a discernible court's duty to develop the common law as necessary to improve the realisation of the rights established by the Act. A point is made in the article that judicial decisions involving the application of company law must be justified by reference to a cohesive set of values from the Bill of Rights. This is part of transformative constitutionalism. It demands that even commercial law principles should no longer be blindly accepted simply because precedent says so, or for the reason that it is expedient for the purposes of commercial certainty. The article argues that the Act permits the direct horizontal application of the Bill of Rights on its provisions in two stated ways. It is also argued that the Act permits the indirect application of the Bill of Rights through the development of the common law where it is deficient in promoting the spirit, purport and objects of the Bill of Rights. The development of the common law, it is argued, is vital for producing an incremental and cohesive body of constitutionalised common law in the company law context.

Trust and Patrimony

2015 ◽  
Author(s):  
Lionel D Smith
Keyword(s):  
Common Law ◽  
Direct Access ◽  
Legal Personality ◽  
The Common ◽  
Trust Property

This chapter examines whether the common law trust can be understood as a patrimony in the civilian sense. It begins with a discussion of Pierre Lepaulle's claim that the common law trust is a patrimony affected to a destination or purpose. It then considers the situation of creditors and beneficiaries in a common law trust before advancing the argument that, contrary to the position taken by Lepaulle, the common law trust is not a patrimony. It contends that only trustees have direct access to the trust assets; trust creditors, and even beneficiaries, do not. It also asserts that the essence of the common law trust lies not in any division of ownership of the trust property, but in the fact that the trust beneficiaries hold rights in the rights that the trustee holds as trust property. The chapter concludes by relating the trust institution to the idea of legal personality.

10. Company law II: directors, finance, and capital

2019 ◽  
pp. 143-159
Author(s):  
James Marson ◽  
Katy Ferris
Keyword(s):  
Common Law ◽  
Company Law ◽  
Public Companies ◽  
Essential Information ◽  
Minority Protection ◽  
Company Directors ◽  
The Common ◽  
The Law ◽  
A Company

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 law governing company directors and shareholders. The common law duties on directors have been codified and expanded through the Companies Act (CA) 2006. Directors are responsible to the company itself, not to individual shareholders. Minority protection (of shareholders) is provided through the CA 2006 to restrict directors’ acts that may unfairly disadvantage them. Public companies must have a company secretary and they must satisfy statutory requirements in relation to their qualifications. Shareholders have no automatic right of management in the company although, through attendance and the rights to vote at shareholder meetings, they may have influence over the business conducted.

Agents without principals: pre-incorporation contracts and section 36C of the Companies Act 1985

Legal Studies ◽  
1993 ◽  
Vol 13 (2) ◽  
pp. 241-253
Author(s):  
Andrew Griffiths
Keyword(s):  
Common Law ◽  
Company Law ◽  
Good Case ◽  
Natural Person ◽  
Legal Effect ◽  
The Common ◽  
Artificial Nature ◽  
A Company

The problems associated with pre-incorporation contracts are due to the essentially artificial nature of a company’s existence and personality. The existence of a company, unlike that of a natural person, is not something which can be readily ascertained but is a matter of legal formality. There is a good case for treating pre-incorporation contracts as sui generis, but until 1973 their legal effect was governed by common law principles of contract and agency which drew little distinction between companies and natural persons. The result was unsatisfactory and widely criticised, one commentator remarking that ‘it is rare to hear such a widespread and common opposition against any aspect of English company law’. Section 9(2) of the European Communities Act 1972 (now to be found in s 36C of the Companies Act 1985) made a partial reform of this law, but did not deal with the inability of a newly formed company to ratify or adopt a pre-incorporation contract made on its behalfeven though this was a major deficiency of the common law.

scholarly journals General Partnerships and the Fiduciary Duty in the US Legal System

Pro Futuro ◽  
2021 ◽  
Vol 10 (4) ◽  
Author(s):  
Márta Plásztán-Brehószki
Keyword(s):  
Common Law ◽  
Civil Law ◽  
High Standard ◽  
Company Law ◽  
Fiduciary Duty ◽  
Agency Relationship ◽  
The Us ◽  
The Common ◽  
The Law ◽  
The One

The law of fiduciary duty is as old as common law. It is the key element of the law of equity. The agency relationship creates a fiduciary relationship between the parties, which means that the fiduciary (agent) is subject to the direction of the one on whose behalf he acts (principal). This high standard of conduct – in the scope of the agency relationship – has become a separate liability form in the common law countries and has appeared not only in company law but in other parts of civil law as well. This paper presents the development and the basic elements of fiduciary duty in the field of general partnerships.

scholarly journals The hidden dimension of the language of corporations in America and Spain: perspectives for inter-legal communications

2006 ◽  
pp. 285
Author(s):  
María Ángeles Orts Llopis
Keyword(s):  
Common Law ◽  
Legal Culture ◽  
Point Of View ◽  
Company Law ◽  
Cultural Dimension ◽  
Corporate World ◽  
Culturally Different ◽  
Legal Communication ◽  
The Common ◽  
Corporate Legislation

Starting from Edward T. Hall's assumptions regarding the cultural dimension as the 'hidden dimension' of communication, this study tries to highlight the fact that legal culture vastly influences legal interaction and, hence, varies from system to system. The translation of Company Law from American Legal English into Spanish consists of an exercise in inter-legal communication, as the translator must be aware of the culturally different way s in which the corporate world is contemplated, from the point of view of both the Common Law and the Spanish Continental systems. Through a detailed analysis of the peculiarities of corporate legislation in these different systems that takes into consideration cultural variance, a discussion on the possibility of inter-legal communication is established. In addition, an account of the mercantile terminology belonging to each peculiar legal country is supplied, aimed at explaining how the two different legal systems envision different ways to establish business relationships and identify their constituents linguistically.

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