Shuttleworth v Cox Bros and Co (Maidenhead)
Encyclopedia
Shuttleworth v Cox Bros and Co (Maidenhead) [1927] 1 Ch 154 is a UK company law case, concerning alteration of a company's constitution.
for life, and had fixed this under its articles of association
. Then it proposed to amend its articles so that a director would lose his position if the other directors requested in writing for him to resign. Mr Shuttleworth, who was targeted by the changes, brought a claim alleging that the alteration of the articles was not bona fide for the benefit of the company as a whole.
Facts
Cox Bros and Co (Maidenhead) had appointed a board of directorsBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
for life, and had fixed this under its articles of association
Articles of Association
The Continental Association, often known simply as the "Association", was a system created by the First Continental Congress in 1774 for implementing a trade boycott with Great Britain...
. Then it proposed to amend its articles so that a director would lose his position if the other directors requested in writing for him to resign. Mr Shuttleworth, who was targeted by the changes, brought a claim alleging that the alteration of the articles was not bona fide for the benefit of the company as a whole.
Judgment
The Court of Appeal held that the shareholders, in changing the constitution to target Mr Shuttleworth were acting irrationally, and the change would be invalid. Scrutton LJ said that the shareholders must act honestly having regard to and endeavouring to act for the benefit of the company. Bankes LJ held,See also
- UK company law
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(1907) Ltd [1920] 2 Ch 124 - Shuttleworth v Cox Bros and Co (Maidenhead) [1927] 1 Ch 154
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