Legal rights - winding up, Business Law and Ethics

Assignment Help:

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.


Related Discussions:- Legal rights - winding up

Utmost good faith, Utmost Good Faith Whether a partnership is such con...

Utmost Good Faith Whether a partnership is such contract of the chief good faith. Every one partner is entitled for utmost gaviness rom his co-partners. Therefore this equitab

Removal - powers of managing director, Removal:             Article 10...

Removal:             Article 107 provides that the managing director's "appointment shall be automatically determined if he cease from any cause to be a director". However it

Who is liable to income tax?, QUESTION 1 Discuss the legal relationship...

QUESTION 1 Discuss the legal relationship between a bank and its customer with reference to the responsibilities of the parties towards each other QUESTION 2 (a) Examin

Negligence - statutory provisions, NEGLIGENCE: It is still uncertain w...

NEGLIGENCE: It is still uncertain whether damage caused by negligence can be brought under the heading of "fraud" for the purpose of the exception of "fraud on the minority."

Diffrence between phoenix activity and honest behaviour, Q. Diffrence betw...

Q. Diffrence between phoenix activity and  honest behaviour? There are circumstances where a business has been managed responsibly and fails, and after a period of time, its di

Regulations regarding hazardous substances, REGULATIONS REGARDING HAZARDOUS...

REGULATIONS REGARDING HAZARDOUS SUBSTANCES A hazardous substance has the potential to harm. It may cause harm to human beings, other living creatures, plants, microorganisms, p

Differences members and creditors voluntary wind up, Differences members an...

Differences members and creditors voluntary wind up: main differences between a members' and a creditors' voluntary winding up are that : (a) in a creditors' voluntary win

Contracts illegal at the common law, Contracts illegal at the common law ...

Contracts illegal at the common law However a contract which is prohibited through the common law is frequently described as being as "contrary to public policy" as i.e. the c

Breach of the rtl code, Question Note the behaviour of all parties wi...

Question Note the behaviour of all parties with respect to the Mitchell Jones scenario which is (or could potentially be) a breach of the RTL Code and why you believe the beh

Standard of proof in civil cases, Standard of proof in civil cases: Th...

Standard of proof in civil cases: Therefore the standard of proof in civil cases is on a preponderance of probabilities or on a balance of probabilities.  So it must be more p

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