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International Journal of Law and Management: Protection of shareholders class rights in company law
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Abstract
Purpose – A company that is registered with share capital may issue different classes of shares and may
confer rights on members, which place them in different classes in the company’s organisational structure.
This paper is concerned with the propensity for encroachment on such vested class rights as companies strive
to wriggle out of business challenges spawn by the COVID-19 pandemic. The purpose of this study is to
ascertain the extent of protection that the law accords to the different classes of shareholders and members in
a company especially when the company seeks to vary the vested class rights.
Design/methodology/approach – A doctrinal methodology, which relies on existing literature, case law
and statutory instruments, is adopted to explore the nature of class rights and the adequacies of the remedial
measures availed by statute to the aggrieved bearers of class rights in the context of the South African
Companies Act 71 of 2008 with inferences drawn from the UK companies statute and case law.
Findings – The findings indicate that accessing the remedies available to aggrieved shareholders under the
relevant statutory provisions are fraught with conditionality, which could make them elusive to those who
may seek to rely on such provisions to vindicate any encroachment on their class rights.
Practical implications – The paper embodies cogent information on the interpretation and application of
the relevant statutory provisions geared at the protection of shareholders class rights, which should serve as
guides to companies and the courts in dealing with matters that affect the vested class rights of shareholders
and members of a company.
Originality/value – The paper shows that protections offered to classes of shareholders under the law can
also be extended to classes of members who are not necessarily shareholders, and that shareholders who seek
to vindicate their class rights may conveniently rely on Section 163 that provides for unfair prejudice remedy
to avoid the onerous conditions under Section 164 of the South African Companies Act 71 of 2008, which
directly deals with class rights.
Anthony Nwafor - Personal Name
NONE
Text
ENGLISH
EMERALD INSIGHT
2021
ENGLAND
JURNAL ILMU HUKUM
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APA Citation
Anthony Nwafor. (2021).International Journal of Law and Management:
Protection of shareholders class
rights in company law.(Electronic Thesis or Dissertation). Retrieved from https://localhost/etd