ABSTRACT
The statutory derivative action introduced in the Companies Act 2006, which provides for new procedure to replace the procedure of the common law derivative action, as well as giving the courts considerable discretion to further restrict shareholder representation. The courts first set out the barrier to shareholder management qua shareholder in the 1840 case Foss v Harbottle, which held that only the company can sue in respect of a wrong done to it. Foss, concerned a corporation, not a modern registered company. The rule in Foss remains integral to the new statutory derivative action introduced by the Companies Act 2006; the law intends shareholder involvement in company management to be very limited. The section 994 petition in particular is pertinent to small companies that often are better described as quasi-partnership, rather than the larger companies than are the focus of discussion in this chapter.
