Majority Rule

MAJORITY RULE The bulk determine in ships play along law of nature states that if the majority of fateholders do not wish well to pursue an exploit at law then the nonage is bound by that decision. The rule in foss v harbottle asseverate the majority rule. The rule in Foss v Harbottle (1843) is that when a revile has been committed against the community, the proper claimant in appraise of that wrong is the company itself. The rationale for the rule is bothfold: 1. It prevents a numerous of legal proceedings being brought in the wish of the same issue. If minority shareholders were permitted to start up such proceedings at that place could be hundreds of actions. 2. It upholds the prescript of majority rule: if the majority of shareholders do not wish to pursue an action then the minority is bound by that decision. In Foss v harbottle the claimants were two share holders in the capital of Seychelles park company. They brought an action against the co mpanys five directors and promoters, alleging that the defendants had steal assets belonging to the company and had improperly mortgage its property. The claimants sought an enjoin to compel the defendants to make good the losses suffered by the company. It was held that the actions must fail. The harm in question was suffered by the whole company not just by the two shareholders.

It was open to the majority in the general meeting to admire the defendants conduct. To allow the minority to bring an action in these draw would risk prevent the wishes of the majority. The case of MacDougall V Gardiner (1875) is a sportsmanlike application of the rule that! illustrates how it fits with the principle of majority rule, where again the COA held that the ass of the complain was something that in substance the majority of the shareholders were entitled to do not an several(prenominal) shareholder. Having considered the issue of standing to sue we immediately turn to view the types of action available to the minority. * Representative action: brought by a...If you motivation to get a full essay, order it on our website: BestEssayCheap.com

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