Shareholder And Director Decision Making: Correcting Defective Decisions

A properly advised company will fulfil its legal obligations when making corporate decisions. However in many companies, decisions are made informally and are often not recorded. Whilst many everyday business decisions taken by directors and/or employees raise no questions of company law, in other cases strict legal formalities have to be observed, for example, giving correct notice of meetings and ensuring the relevant quorum is met, at board and at shareholder level. This article focuses on instances where the validity of company decisions has been challenged because legal formalities have not been complied with. As this article will illustrate, judicial response to such cases has been varied depending on who the legal formalities are considered to be there to protect.