MAJORITY RULE
Chapter 11 of the Subject Guide
,INTRODUCTION
, INTRODUCTION
One of the consequences of the [Salomon] Principle is that a
company can sue in its own right to vindicate a wrong done to it.
Thus, whenever a wrong has been committed against the company,
the proper claimant is the company itself.
But the issue is that what if the wrongdoers are the Directors
themselves, who, controlling the company, prevent it from seeking
legal redress against them?
This is the main focus of this chapter where we consider how the
law seeks to solve this problem by permitting minority shareholders,
in certain exceptional circumstances to bring a derivative action on
the company’s behalf.
Chapter 11 of the Subject Guide
,INTRODUCTION
, INTRODUCTION
One of the consequences of the [Salomon] Principle is that a
company can sue in its own right to vindicate a wrong done to it.
Thus, whenever a wrong has been committed against the company,
the proper claimant is the company itself.
But the issue is that what if the wrongdoers are the Directors
themselves, who, controlling the company, prevent it from seeking
legal redress against them?
This is the main focus of this chapter where we consider how the
law seeks to solve this problem by permitting minority shareholders,
in certain exceptional circumstances to bring a derivative action on
the company’s behalf.
