Question
Acme Ltd's share capital is made up of 100,000 ordinary shares and 1,000 preference shares which come with a right to a 25% preferential dividend.
Acme Ltd's share capital is made up of 100,000 ordinary shares and 1,000 preference shares which come with a right to a 25% preferential dividend. Because of this large preferential dividend right, Acme is having trouble raising much needed ordinary share capital, so its board proposes reducing the company's share capital by returning the preference share capital. After giving 21 days' notice to shareholders, it holds a general meeting of its shareholders but not all of them attend. At the meeting, both the ordinary and preference shareholders who attend the meeting vote unanimously to approve resolutions to return the preference share capital. Rhonda holds 2% of the preference share capital. Unfortunately, her notice of meeting was lost in the mail, so she did not receive it and she does not attend the meeting. If she had attended, she would have opposed the resolutions. Advise Rhonda what action, if any, she can take with respect to the return of preference share capital. Would it have made a difference if Rhonda held 22% of the preference share capital?
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