chapter  9
42 Pages


Shareholders are sometimes referred to as ‘residual controllers’ of the company. Four main points support this:

 the law requires certain fundamental decisions to be made by the shareholders;  whilst the articles normally entrust management to the board of directors they also

usually reserve a right for shareholders to direct the board by special resolution on any specified matter;

 if the board is unable to act, power will revert to the shareholders;  shareholders have the right to remove directors from office (and usually have the

right to appoint directors).