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Assignment Business Law | Shareholder's Rights

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Added on  2020-05-16

Assignment Business Law | Shareholder's Rights

   Added on 2020-05-16

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Running head: BUSINESS LAWBUSINESS LAWName of Student-Name of University-Author note-
Assignment Business Law | Shareholder's Rights_1
1BUSINESS LAWAnswer 2.1The shareholders of the FCWNZL discovered around the same time that there wasanother unit (Parnell), which required little work for the purpose of the business and would alsoreduce the overall cost of the company. The shareholders have a legal right to make a specialresolution for approving a major transaction of the company, vide section- 106(1) of theCompanies Act, 1993 or the shareholders can, vide section-177 of the Act, can pass an ordinaryresolution in a general meeting and ratify any breach of officer’s duty and ratification makes anunauthorized act valid (Evans, 2016). The board, by delegating the power to Diane, signed theagreements for the Epsom unit, without informing the shareholders and hence, there was abreach of duty as it was a major transaction related to the company. Therefore, the shareholderscan revoke the both the agreements only after making a special resolution under section- 106(1)or an ordinary resolution for ratification under section- 177 of the Act (Hannigan, 2015). In Re Duomatic Ltd[1969] 2 Ch 365, it was held that shareholders, having a right tovote at a general meeting of the company, can assent to a matter, which a general meeting ofthe company could carry into effect, and that assent is as binding as a formal resolution.Answer 2.2According to section- 36 of the Company Act, 1993, the share holders of a company havecertain rights (Haldane, 2015). Every shareholder of the company has the right to cast 1 vote atmeetings of the company on any resolution, which may include: i.Appointment or removal of directors or auditors.ii.Adoption of a constitution.iii.Can change the company’s constitution, if any.
Assignment Business Law | Shareholder's Rights_2

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