In the case of Samantha, it can be said that her right was violated. Holding 5% share to a company is something that entitles a person to several responsibilities and as well as rights and liabilities. Therefore, as a member and shareholder of the company, Samantha has the right to know what is happening inside the company, as a shareholder, especially in matters that involve decision making. First and foremost, it is Samantha’s right to know and take part of the company’s decisions.
A large amount of the company’s asset was at stake therefore, every shareholder must be well informed and consulted. In these cases, a meeting among shareholders and board should be made. However, in Samantha’s case, she was not even aware of such decision was made and if there even was a meeting done regarding the matter. She only knew about the plan after the decision was made. The decision made by the Filo Ltd. to purchase ? 450,000 worth of premises from Pastry Products Ltd was solely made by two persons; Richard and Anthony who both own 22% shares in the said company.
Upon being uninformed regarding the decision of the board, the board was also unable to support their decisions that the said action was necessary for the whole company. Since Samantha was not part of the board and therefore not entitled to make such decisions, being a shareholder, she deserves an explanation on issues of which she found questionable. Samantha deserves an explanation but the board itself was unable justify their decision. Thus, it creates a notion that the decision was indeed to benefit the shareholders Richard and Anthony as well as Pastry Products Ltd rather than Filo Ltd.
Thus, there is a great chance that there had been conspiracy within the company. On the other hand, there is less that Samantha can do since she was not a member of the board like Anthony and Richard. Indeed, she has a 5% share to the company which can be considered a necessary for the company. However, the ones who are really responsible in decision making was the board of which Samantha was not included. Thus, it is only the responsibility of the board to inform Samantha about the decision and to answer her questions if she has doubt about the decision, something that the board was unable to do.
The board should be able to justify their decisions and provide proofs for the necessity of the decision otherwise, it could lead to decision that the members of the board are not capable to handle the company and thus, must be replaced. Another factor that is to be considered is that Richard and Anthony hold 26% share to the company which totals to 52%. Although in some companies, every shareholders is entitled a single vote count in which the majority of persons are able to make the decisions in the company.
If this is the case then Samantha was also denied the right to take part in making decision however, this is not the case. Anthony and Richard would only need 50 + 1% of the company’s total share in which, adding both Anthony’s and Richard’s share, would be sufficient. Thus, the approval of both Richard and Anthony would be sufficient to make a decision in the company. Therefore, the decision may have followed the proper proceedings but the validity and necessity of the decision cannot be justified since it was evident that it was intended for the benefit of Pastry Products Ltd.
A large amount of the company’s asset was at stake therefore, every shareholder must be well informed and consulted. In these cases, a meeting among shareholders and board should be made. However, in Samantha’s case, she was not even aware of such decision was made and if there even was a meeting done regarding the matter. She only knew about the plan after the decision was made. The decision made by the Filo Ltd. to purchase ? 450,000 worth of premises from Pastry Products Ltd was solely made by two persons; Richard and Anthony who both own 22% shares in the said company.
Upon being uninformed regarding the decision of the board, the board was also unable to support their decisions that the said action was necessary for the whole company. Since Samantha was not part of the board and therefore not entitled to make such decisions, being a shareholder, she deserves an explanation on issues of which she found questionable. Samantha deserves an explanation but the board itself was unable justify their decision. Thus, it creates a notion that the decision was indeed to benefit the shareholders Richard and Anthony as well as Pastry Products Ltd rather than Filo Ltd.
Thus, there is a great chance that there had been conspiracy within the company. On the other hand, there is less that Samantha can do since she was not a member of the board like Anthony and Richard. Indeed, she has a 5% share to the company which can be considered a necessary for the company. However, the ones who are really responsible in decision making was the board of which Samantha was not included. Thus, it is only the responsibility of the board to inform Samantha about the decision and to answer her questions if she has doubt about the decision, something that the board was unable to do.
The board should be able to justify their decisions and provide proofs for the necessity of the decision otherwise, it could lead to decision that the members of the board are not capable to handle the company and thus, must be replaced. Another factor that is to be considered is that Richard and Anthony hold 26% share to the company which totals to 52%. Although in some companies, every shareholders is entitled a single vote count in which the majority of persons are able to make the decisions in the company.
If this is the case then Samantha was also denied the right to take part in making decision however, this is not the case. Anthony and Richard would only need 50 + 1% of the company’s total share in which, adding both Anthony’s and Richard’s share, would be sufficient. Thus, the approval of both Richard and Anthony would be sufficient to make a decision in the company. Therefore, the decision may have followed the proper proceedings but the validity and necessity of the decision cannot be justified since it was evident that it was intended for the benefit of Pastry Products Ltd.
Source: law aspect
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