Automatic Self-Cleansing Filter Syndicate Co v Cunningham [1906] 2 Ch. 34

Company Law

Automatic Self-Cleansing Filter Syndicate Co v Cunningham [1906] concerns the powers of the general meeting when the directors’ have the management powers.

 

Keywords:

Company law Directors Articles of association – Management powers – Resolution – Sale of company’s assets

Facts:

In the case of Automatic Self-Cleansing Filter Syndicate Co v Cunningham [1906], the articles of association gave the management powers to the board of directors. The general meeting of the company passed a resolution by a simple majority of the shareholders. The resolution concerned the sale of the company’s assets. The directors of the company declined to comply with the resolution. They thought that a sale on those terms did not benefit the company.

Issue:

Whether the directors should have complied with the resolution selling the company’s assets?

Held:

The court noted that the company’s articles of association determined which organ had the powers of management. In the present case, the management powers were given to the board of directors.

Therefore, in these circumstances, the general meeting has no power to interfere with the management of the company by the directors by simply passing an ordinary resolution.

 

Read our cases and notes on Company Law to learn more!

 

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