In Cyprus and according to the rule established by FOSS v
HARBOTTLE, when a wrong is being committed against a company, the
company should be the claimant in any Court action to protect its
rights. Thus, the majority of the shareholders must agree to issue
Court proceedings. No minority shareholder can initiate such Court
action when the majority of the shareholders of the company are in
favour of the alleged wrong actions. Nonetheless, there are four
exceptions to this rule:
1. ULTRA VIRES OR ILLEGAL ACTS: A shareholder can initiate a
personal action against the company when the company ratifies an
illegal act or an act which is outside the scope of its
constitution.
2. ACTS REQUIRING A SPECIAL MAJORITY: A company cannot approve
acts which require a special resolution simply by a majority only
sufficient for an ordinary resolution and not a special resolution.
A company is not permitted to breach its own Articles. In this case
it is not the company that has been
