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Law Notes Company Law Notes

Corporate Governance Notes

Updated Corporate Governance Notes

Company Law Notes

Company Law

Approximately 805 pages

Company law notes fully updated for recent exams in the UK. These notes cover all the major LLB company law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Canada, Hong Kong or Malaysia (University of London). These notes were formed directly from a reading of the cases and main texts and are vigorous, concise and very well written.

Everything is conveniently split up by topic as you can see by the list o...

The following is a more accessible plain text extract of the PDF sample above, taken from our Company Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:


The Board of Directors and their Management Jurisdiction 54

Gower Chapter 14: The Board 54

The Role of the Board 54

Appointment of Directors 59

Remuneration of Directors 60

Removal of Directors 63

Structure and Composition of the Board 65

Conclusion 68

Cases 68

Bushell v Faith [1970] AC 1009 68

Breckland Group Holdings Ltd v London & Suffolk Properties Ltd [1989] BCLC 100 70

Automatic Self-Cleansing v Cuningghame [1906] 2 Ch 34 70

Shareholder Decision-Making 70

Gower Chapter 15: Shareholder Decision-Making 70

The Role of Shareholders 70

Shareholder Decision-Making without Shareholder Meetings 71

Improving Shareholder Participation 73

The Mechanics of Meetings 75

Conclusion 80

Cases 80

Barron v Potter [1914] 1 Ch 895 80

Quinn & Axtens v Salmon [1909] AC 442 81

Byng v London Life Association Ltd [1990] Ch 170 81

EIC Services Ltd v Phipps [2004] BCLC 589 81

Re Express Engineering Works [1920] 1 Ch 466 81

Wright v Atlas Wright Ltd [1999] 2 BCLC 301 82

Schofield v Schofield [2011] EWCA Civ 154 82

Union Music Ltd v Watson [2003] 1 BCLC 453 82

Smith v Butler [2012] EWCA 314 83

Bonham-Carter v Situ Ventures Ltd [2012] EWHC 320 83

Madoff Securities International v Raven [2013] EWHC 3147 83

Speechley v Allott [2014] EWCA Civ 230 83

Articles 83

Bainbridge, Director Primacy and Shareholder Disempowerment (2006) 119 Harv LR 1735 83

Bebchuck, The Case for Increasing Shareholder Power (2005) 118 Harv LR 833 84

Grantham, The Unanimous Consent Rule in Company Law [1993] CLJ 245 84


Bushell v Faith [1970] AC 1009

Facts: Family holding company of real estate. Three directors: two sisters and one brother. AoA Art 9 provided that, on any resolution to remove a director, that director’s shares to have three votes per share. CA S168 (now) provides that a director may be removed by ordinary resolution. Sisters wishes to remove brother. Was the weighting invalid meaning they removed him by 200 votes to 100, or was the triple weighting valid meaning that the resolution for removal did not pass so it failed 200 to 300.

Held: Provision valid. Drafters knew of common practice of weighting but did not seek to expressly exclude it.

Counsel for sisters:

  • Public policy argument against making a director’s removal without his consent impossible

  • Would ‘make a nonsense’ of the law

  • Parliament has only picked a few situations where CA will override AoA – court should give effect to those circumstances by not allowing contracting out.

  • Otherwise, the Act would be frustrated.

  • Note restrictive approach to such contracting out approach in Australia: Pye v Minister for Lands NSW [1954]

Counsel for brother:

  • Look at the language of the Act – legislative intent was actually ‘limited advance of shareholder control’.

  • Historical context: prior to 1948, removal typically required majority

  • Intention was to reduce this to primarily viz quoted companies, which has been achieved through twin effect of CA and LR

  • But a more protective approach may be valid for quasi-partnerships

  • Per Russell, the same effect could be achieved via SHA anyway

  • Note also that weighted voting is very common and is readily accepted in other areas of CA – what makes this different?

  • Ordinary Resolution simply means one passed with a bare majority of votes cast – not incompatible with weighting

Reply by sisters:

  • But here, Parliament did intend to interfere with voting rights in a way that was incompatible with weighted voting

  • Parliament could have restricted new rule to quoted companies but did not – issue is CA not LR

Lord Reid:

Would dismiss the appeal (provision valid)

  • AoA Art 9 certainly appears to evade the Act

  • Effect is that no Director may be removed without his consent.

  • However, the law is not unfamiliar with weighted voting

Lord Morris:

Would allow appeal (would strike down AoA Art 9) – wrong to allow this because it would make director irremovable against his will

Lord Guest:

Would dismiss appeal – agrees with Lord Donovan

Lord Upjohn:

Would dismiss appeal

  • A company may issue shares with special rights

  • Act did not prevent such weighting in any way

  • “Normal” vote may be show of hands but that does not mean that weighted voting is not permissible

  • 3:1 in other situations would be valid so why not here?

  • If Parliament’s intention was to prevent this, they should have made it clearer

  • Some matters better to be left to business people to sort out themselves

Lord Donovan:

Would dismiss appeal

  • Look at true construction of the provision

  • S184 (today S168) overrides any AoA requirement for vote to remove director, or irrevocable appointment as director for life – this is already extensive

  • But weighted voting is a normal part of Company law (how is this different from ?)

  • Drafters must have known of this possibility but chose not to include it

  • Sometimes, it is necessary to keep family quarrels within the home and not let them spill over to the boardroom in such quasi-partnerships or family companies

Breckland Group Holdings Ltd v London & Suffolk Properties Ltd [1989] BCLC 100

B Ltd owned 49% L Ltd; C Ltd owned controlling 51%. C Ltd and B Ltd had SHA – C Ltd to appoint 2 Directors; B Ltd to appoint 1 Director. SHA provided that, if L Ltd were to commence legal proceedings, it had to be approved by the B Ltd Director and at least one C Ltd Director in writing.

L Ltd brought legal proceedings against controlling shareholder of B Ltd. This had not been approved by the board. B Ltd thus brought an action to restrain proceedings.


  • B Ltd director was not bound to vote to allow proceedings in interests of the company. Although he had fiduciary duties as director, it was impossible to say that he necessarily had to vote in favour of allowing proceedings.

  • B Ltd could not force General Meeting to vote to allow legal proceedings to continue by Ordinary Resolution. What the AoA had specified was a matter for the board would be a matter for the board, and what the AoA had specified was a matter for the members would be a division that...

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