Business law Essay Example | Topics and Well Written Essays - 2750 words - 2

Business law - Essay Example In this context, the case of Foss v Harbottle1 will be relevant, since it allows for the protection of minority shareholders within a Company and allows them to file suit against unfair conduct and a compromising of their interests. For example, in the case of Burland v Earle2 the issue under consideration was the allegation of the minority shareholders that fraud was being perpetrated on them, and those responsible for the fraud were the ones in control of the company. While Higbert may not be able to contest the manner in which he is being marginalized on the basis of fraud, he can certainly bring suit against the other Directors who are in control of the Company for conduct that is unfair to his interests as a shareholder and Director of the Company. In his position as a minority shareholder, Higbert can consider bringing a suit against the other three Directors under Section 459 of the Companies Act of 1985, requesting the Court to pass an order decreeing that the affairs of the Company â€Å"are being conducted or have been conducted in a manner which is unfairly prejudicial to its members generally or of some part of its members.†2 Higbert also satisfies the conditions necessary for a person to file under Section 459, i.e, (a) he is one of the shareholders affected by the prejudicial conduct and (b) action under Section 459 can also be taken for proposed unfair conduct. Re R.A. Noble and Sons (Clothing Ltd)3 – in this case, the Company was founded as a quasi partnership, along similar lines as Hippos Ltd where the partners were also shareholders. One shareholder sued and won under Section 459, because he was excluded from the management. In effect, maginalizing Higbert also amounts to partial exclusion from the management of the Company and therefore this case may be successfully applied in Higbert’s case.. Other