Shareholders' Rights Flashcards
What do articles act as in relation to shareholders?
A contract so shareholders can sue under s33 CA 2006 if their membership rights are infringed
What is the remedy for shareholders if their rights are infringed?
Damages
List rights that shareholders can enforce.
- Right to a dividend
- Right to share in surplus capital on a winding up
- Right to vote at meetings
- Right to receive notice of GMs and AGMs
What terms are implied in the contract formed by the articles?
No terms are implied into the contract
This means that only the explicit terms stated in the articles are enforceable.
What is a Shareholders’ Agreement?
An extension of articles that includes procedures such as unanimous voting over certain matters, dividend policy, allotment of new shares, new and departing shareholders
Are Shareholders’ Agreements private?
Yes
How is enforceability handled in Shareholders’ Agreements?
One member can enforce against another under general contract law principles if there is a SH agreement
What happens if matters reserved for unanimous decisions in a shareholder agreement are not followed?
Shareholders can still use default CA or MA provisions but can be sued for breach of shareholders’ agreement
What is required for changes to a Shareholders’ Agreement?
Unanimous approval of all parties
What does any SH have the right to?
- Receive info of a GM and vote/appoint a proxy
- Receive a copy of accounts
- Receive dividend if declared
- Inspect minutes and register
- Ask the court to prevent a breach of direcotrs’ duties
- Bring a petition for unfair prejudice
- Commence derivative claim
- Bring a petition for just and equitable winding up
What percentage of the SHs can require directors to call a GM/circulate a WR?
5%
What percentage of SHs is required to demand a poll vote?
10% or 2 or more SHs who are eligible to vote
