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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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Who brings an action against Directors for breach of Section

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Who brings an action against Directors for breach of Section 291 Companies act
Alex J.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. A shareholder can bring an action in the name of the company for any breach of director duties under S.260 of the Companies Act 2006 - known as a derivative action. The actual punishment detailed under S.291 is a criminal punishment so this would actually be a matter for the police. It would however have to be a particularly serious breach of this section to secure a successful prosecution. Can you provide me with any facts? Kind regards AJ

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Customer: replied 1 year ago.
Thanks, Alex,
A Board of Directors of a Housing Company with 69 Leasehold shareholders have tabled a Special Resolution, (Actually so described) for a vote at an Extraordinary General meeting, Whilst Section 283(6) specifically states that a majority of 75% is required, the Directors have not complied with their responsibilities in accordance with Section 291(4) (a) by stating how the vote is to be undertaken, neither have they given any statement as to the rights of shareholders. It is suspected that they will try and force the vote through by a show of hands as a simple majority at the EGM. The shareholders are trying to protect themselves against excesses of this Board.

Hi, Thank you. Have all the shareholder received notice of the meeting? Do you have enough support to remove the board of directors? Kind regards AJ

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Customer: replied 1 year ago.
Unfortunately that would mean a Special Resolution requiring 75% majority, all we want them to do is comply with the Companies Act and the Articles of association,RegardsBob

Hi thank you. In order to remove a director you only need an ordinary resolution. That may be a more straight foward process - do you have support of 51% of the voting members/shareholders. Kind regards AJ

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