What is the significance of Gambotto case?
Australian legal history. In Gambotto, the High Court of Australia struck down an amendment to a company’s constitution2 which enabled the majority shareholders to compulsorily acquire, or expropriate, the shares of the minority.
What is the gambotto test?
The majority laid down a two-limbed test that must be satisfied when wanting to amend a constitution to permit expropriation: the power is exercisable for a permissible purpose; and. its exercise will not operate oppressively in relation to minority shareholders.
What is the expropriation of shares?
In other words, an expropriation may be justified where it is reasonably apprehended that the continued shareholding of the minority is detrimental to the company, its undertaking or the conduct of its affairs — resulting in detriment to the interests of the existing shareholders generally — and expropriation is a …
What is the proper purpose test in amending the Corporate Constitution?
Proper purpose Where the purpose of the amendment is to prevent significant detriment or harm being done to the company because of the minority shareholder.
What is a minority shareholder Australia?
A minority shareholder can be any person or entity that owns and controls less than 50% of all shares issued by a company.
What is an action for oppression?
It empowers the shareholders to bring an action against the corporation in which they own shares when the conduct of the company has an effect that is oppressive, unfairly prejudicial, or unfairly disregards the interests of a shareholder.
What is statutory derivative action?
The statutory derivative action is a special type of court action that enables a shareholder to pursue a wrongdoer in the company, for example, by proceeding against a director for breach of directors’ duties.
What expropriation means?
Expropriation is the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public. In the United States, properties are most often expropriated in order to build highways, railroads, airports, or other infrastructure projects.
What does expropriate land mean?
Expropriation is a process through which the government or other public bodies have the ability to acquire land that is privately owned without the permission of the property owner.
What are replaceable rules and how do they differ from a constitution?
The replaceable rules are set out in the Corporations Act and are a basic set of rules for the company’s management. A constitution is a contract between the company, its directors and its members which covers, for the most part, very similar matters to the replaceable rules.
How can the company’s internal rules be changed amended?
A company can adopt a constitution before or after registration. A company can change or repeal its constitution by passing a special resolution. A special resolution needs at least 28 days notice for publicly listed companies and 21 days notice for other company types.
What rights does a 5% shareholder have?
A shareholder or group of shareholders representing at least 5% of voting rights can request the directors of the company to call a general meeting (section 303, Companies Act 2006). A shareholder cannot ask a court or government body to call or intervene in a general meeting.