ABSTRACT
It is not uncommon for a new generation which takes over a family company to have very different ideas about how the company should be run. The law will not intervene to restrain the directors from pursuing a different policy or business, even where it is a new venture in which the company has no expertise. For example, in Re A Company (No 002567 of 1982) (1983), a minority shareholder in a company which was engaged in advertising failed in his attempt to prevent the company from using some of its surplus funds in opening a wine bar. However, where the change of policy necessitates a change of the memorandum or articles, there are appropriate statutory procedures which must be complied with and dissident shareholders may have the right to make their objections known to the court and sometimes to have the change struck down. The courts, in considering applications by disgruntled shareholders, have to balance the right of the majority of members to run the company (or have the directors run it on their behalf) as they wish and the question of whether there is any necessity, especially where statute does not give a remedy, to protect the interests of individual shareholders, even if this stymies the majority.
