Legal rights - winding up, Business Law and Ethics

Legal rights - Winding up:

In substance these two people are really partners" and by analogy with the law of partnership (which permits dissolution if the partners are really unable to work together) it was just and equitable to order liquidation.

(a) The members or directors are associated in the company on the basis of certain understandings but one (or more) exercises his legal rights against another in breach of those understandings with results which are unfair.  Such situations are sometimes referred to as a "fraud on the minority"

                                                  Case: EBRAHIM v. WESTBOURNE GALLERIES (1973)

E and N carried on business together for 25 years, originally as partners and for the last 10 years through a company in which each originally had 500 shares.  E and N were the first directors and shared the profits as directors' remuneration; no dividends were paid.  When N's son joined the business he became a third director and E and N each transferred 100 shares to N's son.  Eventually there were disputes: N and his son used their voting control in general meeting (600 votes against 400) to remove E from his directorship under the power of removal given by Companies Act 1948 s.184 (Kenya, s.185).  E sued to have the company wound up.

Held:

The company should be wound up.  N and his son were within their legal rights in removing E from his directorship but the past relationship made it "unjust or inequitable" to insist on legal rights and the court could intervene on equitable principles to order liquidation.  E's petition for relief on grounds of oppression of minority failed since he failed to make out a strong enough case for such relief.

Posted Date: 1/15/2013 4:51:09 AM | Location : United States







Related Discussions:- Legal rights - winding up, Assignment Help, Ask Question on Legal rights - winding up, Get Answer, Expert's Help, Legal rights - winding up Discussions

Write discussion on Legal rights - winding up
Your posts are moderated
Related Questions
Describe the policy making realities Rational models simply do not describe policy making realities. As policy actors seldom evaluate very many alternatives for action or compa

Order for compulsory liquidation: The Official Receiver also calls separate meetings of creditors and of contributories within one month of the order for liquidation: s.236.

Determine the central feature of politics Indeed this manipulation is a central feature of politics: "Problem definition is the active manipulation of images of conditions by c

Purpose: To enable course registrants to apply their knowledge of ethical principles, skills in ethical analysis, and use of introspection to analyze an actual case that contains

Types and Classification of Law: Rules of law may be classified as like;: For Written For National and International For Public and Private For Substantive

Explain important part in the international law The Use of force is a controversial and complicated issue at international level. The United Nations (UN) Charter declared it un

ISSUE OF NON-STATE ACTORS The concept of Non-state actor is a recent political development, which has, so far, eluded a concise definition. There are no treaties or conventions

Societies:                 Societies are associations registered under the Societies Act 1968. Section 2(1) of the Act defines a society very broadly as including any club, co

Unsecured trade creditors: It refers to a "class" of members or of creditors. Obviously if two or more companies are involved or if one company has two classes of shares, eg.

State about the Median Voter Theorem Percentage of vote necessary for a proposal to be adopted, remember Median Voter Theorem, will affect the difficult of adopting a proposal,