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KembaraXtra – Legal Terms – Majority Rule
Majority rule is the principle that decisions within a company are generally controlled by the majority of shareholders through voting procedures. The rule reflects the democratic structure of company governance.
The principle was famously established in the case of Foss v Harbottle (1843), which confirmed that courts will usually not interfere with decisions properly approved by the company majority.
Despite this principle, the law also protects minority shareholders against unfair treatment. Certain important decisions, such as altering the company’s articles of association, require special majorities rather than a simple majority vote.
Minority shareholders may also seek remedies where the majority abuses its power, commits fraud on the minority, or acts unfairly prejudicially toward minority interests.
Majority rule is the principle that decisions within a company are generally controlled by the majority of shareholders through voting procedures. The rule reflects the democratic structure of company governance.
The principle was famously established in the case of Foss v Harbottle (1843), which confirmed that courts will usually not interfere with decisions properly approved by the company majority.
Despite this principle, the law also protects minority shareholders against unfair treatment. Certain important decisions, such as altering the company’s articles of association, require special majorities rather than a simple majority vote.
Minority shareholders may also seek remedies where the majority abuses its power, commits fraud on the minority, or acts unfairly prejudicially toward minority interests.
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