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Essay / Research Paper Abstract
This 9 page paper looks at a case study supplied by the student. A director of a firm wants to issue more shares, but minorities of shareholders do not want the issue to go ahead. The first part of the paper looks at the rights of minority shareholders and considers what actions they may take to block the issue. The second part of the paper looks at a director who has made a mistake, and considers the fiduciary duty of directors. The last part of the paper considers the issue of a consultant that has potentially sensitive information and has a conflict of interests and discusses the option the directors may have to protect the organization. The paper is written with reference to English law. The bibliography cites 8 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TEsunderland.rtf
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Unformatted sample text from the term paper:
holding 20,000 shares between them, object to the plans for the company to make another preference share issue. There are a total
200,000 shares outstanding so these two shareholders hold only 10% of the share, so to consider where they stand and if they can object to the new share issue it
is the rights of minority shareholders that need to be considered (Hollington, 2007). The general approach to the rights of minority shareholders indicates that there are very limited rights (Hollington,
2007). The shareholders all have the right to vote as laid down in the articles of association and the rights that are
attached to the shares that they hold (Hollington, 2007). In terms of issuing new shares, if the majority of the shareholders are supporting the action there is very little that
the minority shareholders can do. If there is the need for a special or an extradite resolution in the articles of association then it is possible that if there were
other shareholders that objected that a minority action should be taken. Where an action requiring such a resolution is passed, it is possible that of there is a large minority,
which means more than 25% of the share ownership, that oppose the action, they would be able to call for an injunction. However, this means attracting members that have another
15%. This may or may not be possible, it also assumes that the special or extraordinary resolution is needed, this may not be the case ( Lexis; 2009; Hollington, 2007).
There are also other actions that can be taken which may be less drastic. As they hold 10% of the shares
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