Corporate Legal Services
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Corporate Legal Services
Our Corporate Services Department aspires to be…
Are we?
You be the judge.
Here’s one for you:
“A and B start a second-hand car business. A contributes 70% of the start up capital. A gets 70% of the shares. B gets the remaining 30%. For ordinary resolutions A has no difficulty meeting the more than 50% requirement. 6 months later B has taken a back seat and does not do anything for the business. A wants to change the structure of the director’s remuneration. A requires a special resolution. B objects to the resolution proposed by A. A has the majority but only 70% of the vote. A and B did not sign a shareholders’ agreement. This means the default position applies. A needs 75% of the votes to pass the special resolution as provided for by the Companies Act. The absence of a shareholders’ agreement has given B a veto power she does not deserve. We would have advised A to conclude a shareholders agreement to give A the casting vote whenever there is a deadlock at any meeting of shareholders. This advice would have anticipated and solved A’s problem.”