company law
Faculty of Business and Management
BBUS2103
Company Law
January 2013
Companies Act 1965
Section 181: Member’s Remedy
Name: Mohd Afiq bin Sahar
NRIC No: 871226-43-5677
Matric No: 871226435677001
Pages
1. Introduction………………………………………………………………………….3
2. Example of oppressive, disregard of members’ interest and unfairly prejudicial or unfairly discriminatory conduct………………………………………5
Diversion of corporate assets or opportunity………………………………...5
Diversion of profits.………………………………………………………….6
Directors failure to act in the interest of the company……………………….7
Shares issued for improper purposes………………………………………....7
No dividend or inadequate dividend given…………………………………...8
3. The Circumstances Consideration……………………………………………………9
Irregular financial transaction………………………………………………...9
Breach of agreements to repay the loan……………………………………...10
Inaccessibility to the accounts……………………………………………….11
Removal of petitioner as director……………………………………………11
Failure to declare and pay dividends………………………………………...13
4. Recommendation on Section 181 – Member’s Remedy…………………………….14
5. Conclusions………………………………………………………………………….16
6. List of cases………………………………………………………………………….17
7. References…………………………………………………………………………...18
Introduction
The law has developed various remedies where the majority act unfairly or oppressively in order to protect the interests of the company and its member.
The common law remedies based on the rule in Foss v Harbottle and its exceptions are complex and place substantial difficulties upon members who complain of unfair treatment particularly when this involves breaches of directors’ duties.
Who may apply for a remedy?
Under s 181(1) an application for an order may be made by:
A debenture holder of a company.
A member of the company, even if the oppression action relates to an act or proposed act that is against the member in a capacity other than as a member as long as the oppressive conduct also affects him in
BBUS2103
Company Law
January 2013
Companies Act 1965
Section 181: Member’s Remedy
Name: Mohd Afiq bin Sahar
NRIC No: 871226-43-5677
Matric No: 871226435677001
Pages
1. Introduction………………………………………………………………………….3
2. Example of oppressive, disregard of members’ interest and unfairly prejudicial or unfairly discriminatory conduct………………………………………5
Diversion of corporate assets or opportunity………………………………...5
Diversion of profits.………………………………………………………….6
Directors failure to act in the interest of the company……………………….7
Shares issued for improper purposes………………………………………....7
No dividend or inadequate dividend given…………………………………...8
3. The Circumstances Consideration……………………………………………………9
Irregular financial transaction………………………………………………...9
Breach of agreements to repay the loan……………………………………...10
Inaccessibility to the accounts……………………………………………….11
Removal of petitioner as director……………………………………………11
Failure to declare and pay dividends………………………………………...13
4. Recommendation on Section 181 – Member’s Remedy…………………………….14
5. Conclusions………………………………………………………………………….16
6. List of cases………………………………………………………………………….17
7. References…………………………………………………………………………...18
Introduction
The law has developed various remedies where the majority act unfairly or oppressively in order to protect the interests of the company and its member.
The common law remedies based on the rule in Foss v Harbottle and its exceptions are complex and place substantial difficulties upon members who complain of unfair treatment particularly when this involves breaches of directors’ duties.
Who may apply for a remedy?
Under s 181(1) an application for an order may be made by:
A debenture holder of a company.
A member of the company, even if the oppression action relates to an act or proposed act that is against the member in a capacity other than as a member as long as the oppressive conduct also affects him in
References: Committee on Company Law Amendment, (2010), Report of the Committee on Company Law Amendment (Command 6659). Retrieved from http://www.takeovers.gov.au/content/Resources/other_resources/Cohen_Committee.aspx KPT, (n.d), Law of Malaysia; Companies Act 1965, Retrived from http://jpt.mohe.gov.my/RUJUKAN/akta/akta%20syarikat.pdf Pamela Hanrahan, (2012), Commercial Applications of Company Law 2012 (13th Edition), CCH, Malaysia Wikipedia, (2013), Legal Remedy, Retrieved from http://en.wikipedia.org/wiki/Legal_remedy