Derivative Proceedings

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  • Created by: mellon
  • Created on: 28-04-14 21:49
What sections?
s265-9
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What is a derivative action?
Shareholder gets leave to bring action IN THE NAME OF THE COMPANY to sue directors for breach of duty to company
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What acts of the director are included?
Actual or proposed acts or omissions including negligence, default, breach of duty or trust
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What do you need to bring action?
Leave. ex parte and inter partes
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What test is used for leave?
Wishart. Need to show some evidence that could lead you to win but don't need to prove you will win
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What factors are taken into consideration?
Future/past conduct, shareholder's good faith, if there was authorisation or ratification, promotion of the success of the company
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What happens in regards to expenses?
You can seek indemnity from the company
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What happens if shareholder's loss is the same as the company?
The shareholder cannot claim as it is simply a reflection of the company's losses
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Whose existing proceeding can the shareholder take over?
An action raised by C or by another shareholder
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Why would a shareholder take over proceedings?
The original raiser has been slow in prosecution, it is appropriate to do so or if their conduct is an abuse of powers
10 of 10

Other cards in this set

Card 2

Front

What is a derivative action?

Back

Shareholder gets leave to bring action IN THE NAME OF THE COMPANY to sue directors for breach of duty to company

Card 3

Front

What acts of the director are included?

Back

Preview of the front of card 3

Card 4

Front

What do you need to bring action?

Back

Preview of the front of card 4

Card 5

Front

What test is used for leave?

Back

Preview of the front of card 5
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