Agreement between all 5 shareholders and company that share structure of company should not be altered unless certain procedures in agreement were complied with.Resolution was proposed that was not compliant with agreement. C, a shareholder, sought declaration agreement was valid. Held:
· Is permissible for shareholders to agree amongst themselves to exercise voting rights in manner which would be unlawful if they were binding upon company.
· However company cannot validly deprive itself of power to amend its articles.
1) Agreement as between members and company is unenforceable
- However it is severable from agreement as between shareholders.
2) Agreement still valid as between shareholders.