Someone recently bought our

students are currently browsing our notes.

X

Greenhalgh v Arderne Cinemas

[1951] ch 286

Case summary last updated at 21/01/2020 15:31 by the Oxbridge Notes in-house law team.

Judgement for the case Greenhalgh v Arderne Cinemas

Director of company wanted to sell shares to a third party. Company’s articles provided for right of pre-emption for existing members. Director successfully got special resolution passed removing this right of pre-emption from articles. C, a member of company, challenged this. Held:
 
Lord Evershed MR
·        Bona fide for benefit of company as a whole means shareholder must do what, in his honest opinion, is for benefit of company as a whole.
·        However if there is discrimination towards minority shareholders, resolution will be invalid.
·        ‘Company as a whole’ does not mean company as a distinct entity.
Ø  But rather shareholders as a body.
Contradiction – Evershed proposes subjective test, but later states that if there is discrimination (an objective concept), resolution is invalid. 

Have you seen Oxbridge Notes' best Company law study materials?

Our law notes have been a popular underground sensation for 10 years:

  • Written by Oxford & Cambridge prize-winning graduates
  • Includes copious adademic commentary in summary form
  • Concise structure relating cases and statutes into an easy-to-remember whole
  • Covers all major cases for LLB exams
  • Satisfaction guaranteed refund policy
  • Recently updated
Company law Notes

Company law Notes >>