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The End of Leasehold Flats? A Breakdown of the Draft Commonhold and Leasehold Bill
Úna Campbell
Section 994 of the Companies Act 2006 provides one of the most important protections available for shareholders - allowing a shareholder to apply to the court by petition for relief where “the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or of some part of its members (including at least himself),…”. These claims are often termed as “corporate divorce”.
We have previously written about the potential death of the shareholder principle in our previous blogs. The recent Privy Council decision in Jardine Strategic Limited v Oasis Investments II Master Fund Ltd & Ors No 2 confirms what we suspected; the shareholder principle no longer exists in England & Wales.
The High Court has provided welcome clarity in Re KRF Services (UK) Ltd [2024] EWHC 2978 (Ch), confirming that a sole director can validly make decisions on behalf of a company that has adopted the Model Articles without modification, even if the company previously had multiple directors.
For over a century, it has been a well-established rule that a company cannot claim legal privilege against its own shareholders (Woodhouse & Co. Ltd v Woodhouse). This grants shareholders the right to access legal advice obtained by the company concerning its affairs. However, there is a recognised exception to this rule: if the legal advice pertains to actual or anticipated litigation between the company and the shareholder, the company can claim privilege.
The recent case of Alkhawaja v TPL Investment Management Ltd & Anor [2024] ADGMCRI 0009 before the Abu Dhabi Global Market (“ADGM”) Court highlights the need for directors to be mindful of the overarching power of company law when seeking to implement their remuneration packages.
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