Chapter 13 - Remedies and enforcement

Question 1

What is derivative action?

Answer 1

A law suit brought by a corporation shareholder against the directors, management and/or other shareholders of the corporation for a failure my a management.

Question 2

What is personal action?

Answer 2

A legal action instituted personally by the person who has been wronged himself or herself.

Question 3

What is an alternative dispute resolution?

Answer 3

Alternative measures to resolve disputes outside of the court.

Question 4

What is conciliation?

Answer 4

The process of setting disputes by extrajudicial means through seeking an agreed settlement between the parties.

Question 5

What is arbitration?

Answer 5

The determination by an impartial referee of a dispute between parties by means of a legally binding ruling.

Question 6

What is a remedy?

Answer 6

A legal remedy is the means by which a court of law enforces a right, imposes a penalty, or makes some other court order to impose its will.

Question 7

What are Dissenting shareholders?

Answer 7

Minority shareholder.

Question 8

What are appraisal rights?

Answer 8

The statutory rights available to a company’s minority shareholders, who object to certain extraordinary corporate actions, to have a fair price of their shares determined in a judicial proceeding prior to the action and to require the corporation to repurchase their shares at that price.

Question 9

What are two remedies against directors who have abused their position?

Answer 9

1. Application to declare a director delinquent or under probation.
2. Derivative action in terms of Section 165.

Question 10

Who may deliver a demand(notice) to the company?

Answer 10

1. A shareholder/person entitled to be registered as a shareholder.
2. A director
3. A prescribed officer
4. A registered trade union that represents employees, or another representative of the employees.
5. Any person who is granted leave by the court to do so.

Question 11

In personal derivative action, when can a person apply to the court for leave to continue with proceedings in the name of or on behalf of the company?

Answer 11

If:

1. The company failed to take steps as required.
2. The company appointed a person or committee that is not independent.
3. The company accepted an inadequate report.
4. The company acted in a way inconsistent with the reasonable report of an independent, impartial investigator.
5. The company has served a refusal notice.

Question 12

Name three remedies available to shareholders to protect their own rights.

Answer 12

1. Relief from oppressive or prejudicial in terms of Section 163.
2. Dissenting shareholders’ appraisal rights in terms of Section 164.
3. Application to protect the rights of securities holders in terms of Section 161.