Company Law Report – Case Conference | ABSTRACT – Rangers Ltd v Muna and Muna v Rangers Ltd | As a legal team I have been summoned to provide a case conference for both Muna and Ranger Ltd. My duty is to assist them on their legal rights and analyse relevant company law issues which are raised in the legal issue of this case. From analysis I will then place my judgement on what decision is to be held using relevant areas of law and place judgement using stare decisis principle. This case conference is to rule out whether the company’s articles of association can be altered to expel Muna from the company by buying his shares. Kumar, Mark two Majority shareholders wish to bring action against Muna a Minority shareholder who had been employed by Kumar in hope that Muna would always vote as directed by Kumar and that Muna would sell his shares to him after a period of five years at a price to be fixed by Kumar. In recent disagreement of buying shares from Kumar, Muna has turned down offer to buy shares and is assuming control over Rangers Ltd and diverting part of the business to a company in which Muna has interest. |
Case Conference 1 – Rangers Ltd Vs Muna
Issue a) Whether or not the company Ranger’s ltd can proceed with their proposed alteration against Muna. “Any member who carries on Business competing with the company shall be required by the company, by ordinary resolution, to sell his shares to the other members at a fair price to be fixed by the directors.”
Under Section 172 (duty to promote the success of the company) and Section 174 (duty to exercise reasonable care, skill and diligence to protect the company) of the Companies Act of 2006 under directors duties, Kumar and Mark, who act as claimants on behalf of the company as the remaining shareholders, may act, on behalf of Rangers Ltd as claimants against Muna, in due respect to adopt reasonable way and means to stop the fraudulent transactions entered into the company by Muna, and thereby protect the interest of the company not for an individual shareholders beneficiary but as a whole company. In relation to the case of Foss v Harbottle where a claim had been made by minority shareholder decision held in this case was conducted by an annual meeting. It was ruled out in the meeting that no action should be taken against the alleged defendant. Therefore the claim was dismissed from court. Further to the case of Bamford V Bamford (1970) where it was held that the decision to sue is to be taken by the company in a general meeting decided by ordinary resolution. Hence the claim against Muna could be granted in respect of carrying out the basic principle of company law using the majority rule. Furthermore the case of Kiani V Cooper [2010] EWHC 577 CH where the court rules out by balancing the facts in accordance with Section 172 of director’s duties could help the case of Kumar against Muna because Mark being a joint majority shareholder is the only one who has acted in good faith towards the business as a whole.
Case Conference 2 – Muna Vs Rangers Ltd
Issue a) Whether or not Muna can commence legal action against Rangers Ltd preventing them from altering its articles.
Under section 261(3) of the Companies Act 2006 States that a shareholder is guaranteed a right to form a case by derivative action. Hence (3) A derivative claim under this Chapter may be brought only in respect of a cause of action arising from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director of the company. The cause of action may be against the director or another person (or both).’
In Muna’s Case Muna has a right to file a legal claim by derivative action which by statutory right he has authority to pursue such a claim against the shareholders in question Mark and Kumar or against the company as a whole for alleged misconduct of company shares Cooke v Cooke. In order to carry out this legal
