Derivative action - statutory provisions, Business Law and Ethics

Assignment Help:

Derivative action:

In Nurcombe v Nurcombe Lawton L J stated that a derivative action is a procedural device for enabling the court to do justice to a company controlled by miscreant directors or shareholders.  It is called "derivative" because the right to sue derives from that of the company.  In such a case the minority shareholders sue on behalf of themselves and all other shareholders except those who are defendants and may join the company as a defendant.The directors are usually the defendants.  Where the action is successful, the damages awarded belong to the company.

A derivative action is usually appropriate where the wrongdoers have voting control and therefore prevent the company from suing, as in Cork v Deeks or Alexander v Automatic Telephone Co (103).

Although the rule in Foss V Harbottle indicates the right of the majority of the company's members to pass resolutions on the company's behalf, it hedges that right with rules or exceptions which are also intended to protect the interests of minority members in appropriate situations.  But it should be noted that, in the process of protecting their perceived interests, the minority are also in fact, protecting the interests of the company itself since the company cannot protect itself in such situations.


Related Discussions:- Derivative action - statutory provisions

State the law of the sea, LAW OF THE SEA   The  sea  and  all  areas  of  ...

LAW OF THE SEA   The  sea  and  all  areas  of  the  sea  are  regulated  by  international  law.  The  jurisdiction  of international law extends from the right of passage over t

How was negligence the main cause, How was Negligence the main cause? ...

How was Negligence the main cause? Negligence was the major cause: A claim for damages can only succeed when there has been damage or loss to the claimant. Illustrations

Laws and regulations, Here, we have outlined the utility of National Buildi...

Here, we have outlined the utility of National Building Code. We have explained the main features of Factories Act. Some of the provisions of Electricity Act and Rules which are re

Alteration of capital, Alteration of Capital: A company is empowered b...

Alteration of Capital: A company is empowered by S.63 to alter the provisions of its memorandum of association which relates to its registered or authorised capital. However,

Avoidance of floating charges, Avoidance of Floating Charges: Under s....

Avoidance of Floating Charges: Under s.314 liquidation automatically renders void any floating charge created within the period of 12 months before commencement of liquidation

Who uses private welfare, QUESTION 1 Why is the United States, which is ...

QUESTION 1 Why is the United States, which is a leader country in so many areas, so far behind in the provision of social welfare benefits? QUESTION 2 (a) Who uses private

TRANSFER OF TITLE, WHAT ARE THE EXCEPTINS TO THE ''NEMO DAT'' RULE?

WHAT ARE THE EXCEPTINS TO THE ''NEMO DAT'' RULE?

Registers and documents - registered office, Registers and documents - regi...

Registers and documents - registered office: The following registers and documents are also kept at the company's registered office:- i.             The register of members

Contributions of equity, Contributions of Equity Contributions of Equi...

Contributions of Equity Contributions of Equity as: Developed the so called maxims of equity and Provided additional remedies and Provided for the discovery of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd