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The Law of Companies

[B] The Rule in Foss v Harbottle

In Chapter 11: Shareholders’ Remedies

The Law of Companies

Thomas B Courtney
Bloomsbury Professional
Publication Date:
Law As Stated At:
30 September 2012
Third edition
[11.092] The rule in Foss v Harbottle Foss v Harbottle (1843) 2 Hare 461. is one of the most established principles in company law. It has, however, been the cause of considerable confusion. The confusion has resulted largely from the failure to recognise that the rule has two limbs : the first is that where the company has been wronged, the company, and not its shareholders is the proper person to institute proceedings; the second is that an individual shareholder, or shareholders, may not bring proceedings to overturn a decision of the company where that decision is one which a majority of the members may confirm. There is a further complication: members have personal rights which are always capable of being enforced by the members personally. In this section, the law is considered under a number of headings: 1. The principles behind the rule. 2. The rule in Foss v ...
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