Can only be instituted in circumstances in which there is fraud on the minority.
- The minority must discharge the heavy burden of proof i.e. the company is entitled to the remedy sought and that the company cannot itself sue.
- The minority shareholder has no legal right to bring a derivative action.
- The minority must not have participated in the wrongful act complained of
- Legal costs are only recoverable if the action is successful.
-The case may be struck off at the instance of the defendant.?
marto answered the question on February 6, 2019 at 11:05
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Date posted: February 6, 2019. Answers (1)
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In addition to the shares, Anna also holds debentures issued by Pesa Limited, redeemable on 8 August 2003. Anna wishes to dispose of her shares and debentures.
On the other hand, Berita and Charles do not wish Anna's substantial interest in the company to pass to other people upon the sale of the shares and debentures.
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(b) Rita applied for 2,000 shares in Bidii Yako Company Ltd. following her application, no allotment at the time was made. Later on without her application, 2,000 shares were transferred to her and her name placed in the register of members.
Rita knowing that her name was in the register of members took no steps to have it rectified. Later on, the company collapsed. Rita was called upon to pay up on her shares and she has declined to do so arguing that she was not a member of Bidii Yako Company Ltd. She seeks your advice on the matter. Advise Rita
Date posted: February 6, 2019. Answers (1)
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Booker T, the company secretary informs you that Stone Cold a shareholder claims that this transaction should have been approved by the members and that he intends to raise the matter during the next general meeting.
Required
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Date posted: February 6, 2019. Answers (1)