Title

Shareholders' reserve power: Implied terms and public policy

Publication Type

Journal Article

Publication Date

3-2016

Abstract

Do shareholders have reserve or residual powers of management when the board is unable or unwilling to act? In Chan Siew Lee v TYC Investment Pte Ltd [2015] 5 SLR 409, the Singapore Court of Appeal answered this question in the affirmative. In so doing, the court employed a contractarian approach, rationalising the power as one that is conferred on shareholders by a term implied in the company’s constitution on the basis of necessity or business efficacy. But a closer review will demonstrate that the court’s analysis, despite its overt reliance on contractual principles, is ultimately of a hybrid nature that takes on board both contractual as well as public policy concerns. This approach aptly reflects the complex nature of the company’s internal workings and warns against a reductionist approach that tackles the issue from a monolithic (contractual) perspective.

Keywords

company law, shareholders' reserve power, division of power between management and shareholders, terms implied in corporate constitution, public policy

Discipline

Asian Studies | Business Organizations Law | Commercial Law

Research Areas

Commercial Law

Publication

Journal of Business Law

Volume

[2016]

Issue

2

First Page

128

Last Page

138

ISSN

0021-9460

Publisher

Sweet and Maxwell

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