Companies: shareholders

Question 1

Even if profits are available, who must still recommend a dividend?

Answer 1

The board

Question 2

After the board resolve to recommend a dividend, how is it declared?

Answer 2

The recommendation is approved by the shareholders, who declare the dividend by ordinary resolution

Question 3

Can a shareholder assert a claim which arose before they became a shareholder?

Answer 3

No

Question 4

If the shareholder does show a prima facie case, the court must be satisfied of one of what two things at the second stage for them to dismiss the claim?

Answer 4

1. Continuance of the claim does not promote the best interests of the company, or
2. The action was authorised by the company or authorisation would be likely

Question 5

What can a shareholder, even a minority, do if they feel they are being unfairly prejudiced?

If a minority shareholder is successful, what is the most likely remedy?

Answer 5

Petition the court for a remedy

The minority shareholder is bought out at fair value

Question 6

What must any shareholder be able to show to apply to have a company wound up?

Answer 6

1. The company is solvent, and
2. It is just and equitable to wind it up

Question 7

How long after a director leaves must their service contract be retained for inspection by the shareholders?

Answer 7

At least one year