Applied Mathematicsematics

Essential Company Law (Essentials) by Bourne

By Bourne

This e-book is a revision relief for undergraduate scholars of corporation legislations.

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This decision should be contrasted with Brown v British Abrasive Wheel Co (1919). In this case, a 98% majority shareholder wished to insert a provision in the articles requiring the minority who were not prepared to invest further capital in the company to sell their shares as a condition of the majority’s subscribing further capital. This alteration was held invalid. In this case, the power could be used by the majority against the minority. It is extremely rare for the courts to uphold an objection to an alteration of a company’s articles on the grounds that it is not bona fide for the benefit of the company as a whole.

There is no definition in any of the relevant statutes. It is wise, however, to be familiar with some of the dicta in the cases, as questions often revolve around the question of whether a particular individual in a problem is a promoter or not. In Twycross v Grant (1877), Cockburn CJ defined a company promoter as a person who ‘undertakes to form a company with reference to a given project and to set it going and who take the necessary steps to accomplish that purpose’. In Emma Silver Mining Co v Grant (1879), Lord Lindley said that the term had ‘no very definite meaning’.

Thus, in Gluckstein v Barnes (1900), recovery of the indirect profit was granted to the company. The remedy of disgorgement is not available where the promoter has acquired the property in a pre-promotion period. In such a situation, not all of the profit that has accrued is rightly the company’s, even where there has been no disclosure. ). The courts will not intervene in a situation such as this to try to apportion the profits. Instead, it seems that in such a situation, the only remedy that is available is that of rescission (see Re Cape Breton Co, Cavendish Bentinck v Fenn (1887) and Ladywell Mining Co v Brookes (1887)).

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