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n Acta Juridica - A comparative analysis of the derivative litigation proceedings under the Companies Act 61 of 1973 and the Companies Act 71 of 2008 : corporate governance and mergers & takeovers : part ll

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Abstract

Very little protection was afforded to the protection of minority rights in the common law of companies. The motivation for the lack of protection was that a company is a legal person that exists separate from its members. The proper plaintiff principle as mentioned in provides that the company is the proper plaintiff that has to institute legal action where a wrong has been committed against the company. Both the common law and the Companies Act 61 of 1973 provided exceptions to the proper plaintiff rule. The common law provided for a common-law derivative action while section 266 of the Companies Act 61 of 1973 provided for a statutory derivative action. Derivative actions are provided for in section 165 of the Companies Act 71 of 2008. This article compares derivative action litigation proceedings under the 1973 Companies Act with the provisions in the new Companies Act 71 of 2008. The article analyses the unique nature of both the common-law and the statutory derivative actions. It draws a comparison between the statutory derivative action contained in section 266 of the Companies Act 61 of 1973 and section 165 of the Companies Act 71 of 2008.

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/content/ju_jur/2010/1/EJC52738
2010-01-01
2016-12-08
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