Company Law Essay Example | Topics and Well Written Essays - 5000 words

Company Law - Essay Examplen be altered by special resolution.3 However, any revolution must comply with the provisions contained in the social clubs Memorandum of Association and the current Companies Acts. The Memorandum sets out the objects of the company and what the company keep do. wherefore in the event a provision of the Articles is inconsistent with the Memorandum it will be over swayerd.4Any alteration of the companys Article of Association must be conducted in good faith and for the general benefit of the company.5 The underlying rationale is the extent to which the majoritys power is contained so as to prevent majority subjugation of the minority. Put another way, the principles of common law and equity effectively bind the majority share holders in the manifest exercise of their powers at the expense of minority shareholders.6The courts have consistently approached the question of alteration of a companys Articles of Association with extreme caution. There are many variants that are potentially conflicting. For whizz thing a fine balancing of the companys interests and the interests of the members of the company as a form is relevant. The doctrine of majority rule is as equally important to the court as is the protection of the minority from oppression by the majority. Since by virtue of Section 9 of the Companies Act 1985 a majority can alter or amend provisions contained in the Articles of Association, it is important to the court that this is not accomplished by discriminatory or fraudulent means or motives on the part of the majority.The doctrine of majority rule was introduced in Foss v Harbottle. The rationale behind Foss was that any difficulties within the structure of the company ought to be dealt with by ratification by the majority shareholders.7 Inherent in this principle is the courts recognition of the companys dependable to alter its Articles of Association.Jenkins LJ said, where the alleged wrong is a transaction which migh t be made binding