Protection of shareholders class rights in company law

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anthony Nwafor
Keyword(s):  
South African ◽  
Case Law ◽  
Company Law ◽  
The South ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
Class Rights ◽  
A Company ◽  
Business Challenges

Purpose A company that is registered with share capital may issue different classes of shares and may confer rights on members, which place them in different classes in the company’s organisational structure. This paper is concerned with the propensity for encroachment on such vested class rights as companies strive to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to ascertain the extent of protection that the law accords to the different classes of shareholders and members in a company especially when the company seeks to vary the vested class rights. Design/methodology/approach A doctrinal methodology, which relies on existing literature, case law and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial measures availed by statute to the aggrieved bearers of class rights in the context of the South African Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law. Findings The findings indicate that accessing the remedies available to aggrieved shareholders under the relevant statutory provisions are fraught with conditionality, which could make them elusive to those who may seek to rely on such provisions to vindicate any encroachment on their class rights. Practical implications The paper embodies cogent information on the interpretation and application of the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders and members of a company. Originality/value The paper shows that protections offered to classes of shareholders under the law can also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which directly deals with class rights.

scholarly journals Environmental liabilities in insolvency – an area ripe for reform?

2016 ◽  
Vol 8 (3) ◽  
pp. 243-268
Author(s):  
Blanca Mamutse
Keyword(s):  
Case Law ◽  
Policy And Practice ◽  
Environmental Liabilities ◽  
Content Type ◽  
Legislative Reform ◽  
Perceived Need ◽  
Real Picture ◽  
The Uk ◽  
The Impact ◽  
A Company

Purpose The paper aims to examine the question whether legislative reform is the silver bullet for the problems generated by the failure of a company which is exposed to claims arising from the non-fulfilment of its environmental obligations. The limited capacity of the UK insolvency regime to facilitate the fulfilment of a debtor company’s environmental obligations is often illustrated with reference to some significant judicial decisions. However, no real picture has emerged of the frequency with which these issues arise, based on which firm proposals for reform could be advanced. This paper argues that greater regard should be paid to existing mechanisms which provide a means of enabling insolvency risks to be managed or minimised because these point towards the scope for these issues to be resolved through the environmental protection framework rather than through reliance on company and/or insolvency law. Design/methodology/approach Research was conducted into the statutory and non-statutory regulations (such as statutory guidance) and case law principles, which underpin the treatment of the claims against an insolvent (or potentially insolvent) company resulting from its environmental activities. This included research into policies which have a bearing on this area, developed through governmental and civic consultations and studies. Findings The paper concludes that the likelihood of a case for legislative reform being made out is weak, and the focus should accordingly shift to strengthening the effectiveness of existing law, policy and practice. Originality/value This paper is the first (in the UK context) to challenge the perceived need for reform in this area, engaging with recent examples of such corporate failures and the impact of recent legislative and policy developments.

Law, Race and Color in South Africa

1974 ◽  
Vol 4 (3) ◽  
pp. 6-11
Author(s):  
Neville Rubin
Keyword(s):  
South Africa ◽  
South African ◽  
Significant Proportion ◽  
Case Law ◽  
Major Constituent ◽  
The South ◽  
Party Government ◽  
The Law ◽  
Keen Observer ◽  
Entire Apparatus

The word "apartheid" does not appear anywhere in the South African statute book, and a keen observer would be hard put to discover its existence anywhere in the formal texts which make up the law. Yet apartheid is deeply embedded in the law of South Africa.In a country in which neither the content nor the administration of the law has ever been free from racial overtones, twenty-five years of continuous rule by the National Party Government have seen to it that the ideology of segregation has been translated into a formidable pattern of legalized racial discrimination. This pattern is to be observed throughout the entire apparatus of the South African legal system. It is written into the constitution and reflected in the legislature. It is a major constituent of the statute law of the country, and decisions as to the manner in which legislation is to be implemented make up a significant proportion of the case law. Apartheid has involved and influenced both the composition and the conduct of the courts, just as it has affected the legal profession and the teaching of law.

scholarly journals Liability of employers for third party harassment in the UK

2020 ◽  
Vol 63 (1) ◽  
pp. 147-156
Author(s):  
Sam Middlemiss
Keyword(s):  
Trade Unions ◽  
Design Methodology ◽  
Research Study ◽  
Case Law ◽  
Third Party ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
Practical Implications

Purpose This paper aims to summarise current law dealing with third party harassment in workplaces in the UK and make recommendations for improving law. Design/methodology/approach Review of case law, articles etc. Findings It is found that the current law is inadequate and unclear, and in dire need of reform. Research limitations/implications This research study will be useful for trade unions and employers and employees and workers. Practical implications This study supports the cause of reform of the law. Originality/value To the best of the author’s knowledge, this study is an original piece of work.

scholarly journals REPRESENTATION OF A COMPANY WHEN CONTRACTING WITH ANOTHER PERSON UNDER SOUTH AFRICAN COMPANY LAW Makate v Vodacom (Pty) Ltd [2016] ZACC 13

Obiter ◽  
2018 ◽  
Vol 39 (2) ◽  
Author(s):  
Vela Madlela ◽  
Palollo Michael Lehloenya
Keyword(s):  
Board Of Directors ◽  
South African ◽  
Company Law ◽  
Third Party ◽  
Constitutional Court ◽  
Legal Nature ◽  
The Board Of Directors ◽  
The Law ◽  
The Impact ◽  
A Company

A company is an artificial person and has no mind, will or hands of its own. It is, therefore, compelled to act through human agents. The board of directors is responsible for the management and direction of the business affairs of the company. Under South African company law the directors’ powers of management are statutorily entrenched (S 66(1) of the Companies Act 71 of 2008). The board of directors may, however, delegate its powers to an individual director (or individual directors), a committee of the board, a managing director or other officers of the company. Before an individual director or officer of the company can conclude a binding transaction on behalf of their company, they must have the authority to do so. In South Africa, the issue of authority to enter into a transaction or agreement on behalf of a company is dealt with using the principles of the law of agency.The crisp issue in this note relates to the circumstances in which an individual company director or officer who, when contracting with another person, purports to be acting on behalf of the company will bind the company. In the recent case of Makate v Vodacom (Pty) Ltd ([2016] ZACC 13 (hereinafter “Makate v Vodacom”)), which involved a claim for reasonable compensation by the inventor of the concept of “Please Call Me” against Vodacom (Pty) Limited (hereinafter “Vodacom”), the Constitutional Court dealt specifically with the authority of a director to conclude a contract with a third party on behalf of the company. This note discusses Makate v Vodacom and the approach of the court regarding when a company will be bound by contracts concluded by its director or another person purporting to represent the company in a transaction with a third party. It examines the main judgment of Jafta J and the concurring judgment of Wallis J in relation to the legal nature of ostensible authority in the absence of actual authority.The note further looks at the issue of prescription, which Vodacom in its defence raised against the claim for compensation brought by Mr Makate. It explores the circumstances in which prescription can be successfully invoked to deflect a contractual claim brought against a company, the impact of the Constitution in this area of the law and whether the claim lodged by Mr Makate amounted to a “debt” for purposes of the Prescription Act (68 of 1969). To this end, again, both the main judgment of Jafta J and the concurring judgment of Wallis J are examined. This is followed by critical insights on the implications of this case and some concluding remarks.

scholarly journals REGULATION OF MERGERS AND ACQUISITIONS IN TERMS OF THE SOUTH AFRICAN COMPANIES ACT 71 OF 2008: AN OVERVIEW

2020 ◽  
Vol 7 (1) ◽  
pp. 91-118
Author(s):  
M. Phakeng
Keyword(s):  
Mergers And Acquisitions ◽  
South African ◽  
Company Law ◽  
The South ◽  
Shareholder Protection ◽  
Different Types ◽  
New Type ◽  
A Company

The Companies Act 71 of 2008 (the 2008 Act) replaced the Companies Act No. 61 of 1973, effective 1 May 2011. The 2008 Act was aimed at keeping pace with developments in company law internationally. It is not intended to entirely replace the well-established principles and has largely retained the pre-existing South African company law. The mergers and acquisitions provisions are aimed at creating transparent, efficient, and simple procedures. Different types of mergers and acquisitions are clearly defined as “affected transactions” or “offers” in section 117. Section 118 provides for companies to which the provisions apply. The reasons for regulating these transactions and powers of the regulator – The Takeover Regulation Panel, have been reviewed, clarified, and improved. The previous section on disposal of all or greater part of assets or undertaking of a company has been re-written. The 2008 Act further introduces a new type of affected transaction in section 113, in the form of a “merger” or an “amalgamation.” The 2008 Act has retained the scheme of arrangement in section 114, but has changed its format by removing compulsory court application and approval. The courts get involved under certain prescribed circumstances. The 2008 Act has enhanced shareholder protection for fundamental transactions in the form of section 164 – Appraisal Rights and section 115, dealing with shareholder approval of fundamental transactions. Some scholars and practitioners have criticised certain provisions. However, in general, the provisions have received favourable commentary. They regarded as progressive and comparable with others internationally.

“The Terrible Genius of Literature”: Reassessing Reconciliation in Nadine Gordimer’s The House Gun

2015 ◽  
Vol 14 (1) ◽  
pp. 100-120 ◽  
Author(s):  
Audrey J. Golden
Keyword(s):  
South African ◽  
Case Law ◽  
Law And Literature ◽  
Truth And Reconciliation Commission ◽  
Constitutional Court ◽  
The Novel ◽  
The South ◽  
Reconciliation Commission ◽  
Truth And Reconciliation ◽  
The Law

During the three years in which Gordimer drafted The House Gun (1998), she relied heavily on South African case law, international jurisprudence, and the discerning editorial eye of Nelson Mandela’s lawyer, George Bizos. As such, my reading of The House Gun brings new attention to the novel’s engagement with the reconciliatory efforts of the Truth and Reconciliation Commission and the juridical work of the South African Constitutional Court to redefine the terms of reconciliation in the country. Through language in a fictional courtroom, Gordimer’s novel turns the process of repair into one that is always immediate and ongoing. It shifts the primarily retributive focus of the law into a reparative and open-ended endeavor. Justice no longer is something that “is done,” Gordimer explains, but rather is a process equally conceived by law and literature. The novel depicts harm in terms of the interpersonal, spatial, and legal fractures it creates. In this way, it expresses reconciliation in the Commission’s language of bridging an injurious past with a present always open to healing.

The impact of the Salomon principle on directors’ remuneration in the UK

2017 ◽  
Vol 59 (2) ◽  
pp. 257-270
Author(s):  
Ernestine Ndzi
Keyword(s):  
Design Methodology ◽  
Case Law ◽  
Driving Factor ◽  
Separate Entity ◽  
Content Type ◽  
Legal Personality ◽  
To Come ◽  
The Uk ◽  
The Impact ◽  
A Company

Purpose This paper aims to examine the Salomon principle of separate legal personality and its impact on the regulation of directors’ remuneration in the UK. The aim of the paper is to explore the Salomon principle to determine whether it serves as a driving factor for directors’ remuneration levels. The paper will also examine the restrictive approach of the courts to move away from the principle and their reluctance to get involved in directors’ remuneration issues of a company. The paper explains the Salomon principle, describes the nature of the problem on directors’ remuneration and provides an analysis on how the Salomon principle impacts on the directors’ remuneration. Design/methodology/approach The paper reviews case law, statutory provisions and academic opinions on the directors’ remuneration and the concept of separate legal entity. The paper critically reviews the impact of the concept of separate entity on directors’ remuneration. Findings The paper finds that the courts are reluctant to come away from the concept of separate legal personality as well as reluctant to get involved with directors’ remuneration. This reluctance of the court makes the concept of separate legal personality to act as one of the drivers of directors’ remuneration. Originality/value The paper offers a different explanation into why directors’ remuneration continuous to be an issue in the UK. It points out that the concept of separate legal personality is a potential driver of directors’ remuneration in the UK.

A comparative study on disqualification of company directors in the UK and Nigeria

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Samet Caliskan ◽  
Pereowei Subai
Keyword(s):  
Public Awareness ◽  
Legal Framework ◽  
Company Law ◽  
Primary Case ◽  
Advanced Economy ◽  
Content Type ◽  
The Law ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to argue that the disqualification of directors, coupled with other liabilities to which they may be subjected, particularly in insolvency, should be sufficient to deter wrongdoing, because of the impact they tend to have on their personal and professional lives. It, however, argues that the “deterrence” effect would be dependent on the existence of other factors such as the efficient application of the law, publicity and post-disqualification monitoring. Design/methodology/approach Using the UK as its primary case study, while also making reference to Nigeria and Turkey, this paper will show that while the existence of disqualification as a sanction exists in the first two countries, it is virtually absent from Turkey. And that while directors’ disqualification provisions are routinely applied in the UK, they are hardly invoked in Nigeria, except perhaps with respect to listed companies, due perhaps to a lack of awareness of its existence or potency. Findings This paper will conclude by making a case for a stronger application of the law, as it relates to directors’ disqualification in the UK, call for an elaboration of the legal framework in Nigeria as well as the need for a public awareness of its provisions and potential impact and contend that Turkey should put in place a legal framework for directors’ disqualification patterned also after the UK framework. Originality/value The uniqueness of this paper stems from its tri-country focus. In that respect, the UK, which is a more advanced economy, with a robust and dynamic company law regime, is used as the primary case study, whereas at the same time, developments in Nigeria, particularly with that country’s capital market, will be extracted and compared with the UK framework. Turkey, on the contrary, has been chosen as a case study mainly because it has no directors’ disqualification mechanism in its legal system. Comparing directors’ disqualification in one developing country, Nigeria, and a developed country, the UK and determining their upsides and downsides will be beneficial to Turkey in respect to establishing a deterrent effective disqualification mechanism on directors.

scholarly journals Company Directors’ Duties and Conflicts of Interest

2019 ◽  
Author(s):  
Rosemary Teele Langford
Keyword(s):  
Conflicts Of Interest ◽  
Careful Analysis ◽  
Case Law ◽  
Company Law ◽  
General Law ◽  
Company Directors ◽  
The Law ◽  
The Uk ◽  
Statutory Regulation

This book contains the most detailed multi-jurisdictional analysis of directors’ conflicts available drawing together relevant case law, codes and statutory regulation from the law applying to directors of companies incorporated under the UK Companies Acts, with extensive reference to the law in Australia, Canada, Hong Kong and New Zealand. The book provides comprehensive analysis of the conflicts faced by directors and includes the important areas of conflicts of interest, conflicts of duties, unauthorised profits, corporate opportunities, multiple directorships, nominee directorships, and conflicts involving stakeholders’ interests. Difficult aspects of these topics are analysed with reference to the laws of a range of common law jurisdictions. The extensive multi-jurisdictional analysis allows solutions to be presented in relation to difficult legal issues and enables clarification of the legal approach. In addition to detailed coverage and analysis of general law duties, the specific statutory duties are outlined and analysed including those concerning related party transactions. The UK Corporate Governance Code, and Guidance on Board Effectiveness, issued by the FRC in July 2018 are covered extensively. The book provides detail on fiduciary theory, the reach of the term ‘director’, consequences of a breach, remedies, authorisation and the role of disclosure. It also contains a detailed table of key cases concerning corporate opportunities which includes the pertinent facts, whether there was a breach of directors’ duties, and a summary of the important factors in the decision made. The cases are featured in order from instances representing clear breach to those in which no breach was found. The book is significant in its thorough coverage of general law and statutory duties relating to conflicts, and its clarification of the scope and application of currently complex and uncertain duties. It provides clear guidance to academics, practitioners, directors and regulators in each of the jurisdictions on the regulation of conflicts of interest and the implementation of good regulatory practice. This is a key reference work on this important and dynamic area of company law which provides careful analysis of the law set in a practical context.

Comparative Company Law

2019 ◽  
Author(s):  
Carsten Gerner-Beuerle ◽  
Michael Anderson Schillig
Keyword(s):  
Legal Theory ◽  
Case Law ◽  
Company Law ◽  
Legal Capital ◽  
Public And Private ◽  
Business Corporation ◽  
Shareholder Protection ◽  
The Law ◽  
The Uk ◽  
The Eu

This book provides an exposition of company law from a comparative perspective. It analyses important policy issues in the area of company law, including the emergence and nature of the business corporation, EU company law, incorporation and corporate representation, agency problems in the firm, rights of stakeholders and shareholders, minority shareholder protection in corporate control transactions, legal capital, and piercing the corporate veil, as well as corporate insolvency and restructuring law. The book’s main focus is the law of public and private companies in the common law sense (the law of partnerships is referred to and taken into account as necessary). The book’s analysis encompasses the corporate laws of the US, the UK, Germany, and France, as well as the legislative measures adopted by the EU and the relevant case law of the Court of Justice of the EU. It includes edited and, where necessary, translated extracts from leading company case law. The cases are discussed and interpreted in the context of the national and European regulatory frameworks and in light of economic and legal theory, as well as legal history.

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