Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Want to focus on the derivative action. As the concept of company got taken more seriously as a legal person, the court said no it

Want to focus on the derivative action. As the concept of company got taken more seriously as a legal person, the court said no it is not the shareholder who are offended or harmed when directors behave badly. It is the company itself. In that situation, the case foss v harbottle, who decided, the proper plaintiff or the person u can sue is the company itself. But this doesnt still resolve the issue of who is going to sue on behalf of the company . Because the company cant do anything. Here it starts to get complicated is that it is the board of directors who must represent the company. The problem is the board of directors may be the ones who are doing the harm for the company. And on top of that, the shareholders if they are in kahoots? with directors can ratify in board meetings. What this opens up is a possibility against fraud against minority which we will look at cases and this is what common law developed. That in certain circumstances, where the directors behave badly and the shareholders are supporting that, minority might be able to sue as the company

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Law Text and Cases

Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F

11th Edition

324655223, 978-0324655223

More Books

Students also viewed these Law questions