Publication Type

Journal Article

Version

publishedVersion

Publication Date

9-2025

Abstract

An enduring problem with the proper purposes duty is the apparent right of the shareholder to enforce the same despite the duty being owed to the company. The cases on the proper purpose duty have thus far simply assumed the right of the shareholder to do so without dealing with the question of standing. In Tianrui (International) Holding Company Ltd v China Shanshui Cement Group Ltd, the Privy Council dealt with this issue directly and affirmed the shareholder's right to bring the action on the basis of the statutory contract constituted by the memorandum and articles of association of the company. The decision, whilst an appeal from the Cayman Islands, has important implications for shareholder rights as well as how directors’ duties are viewed in the UK and common law jurisdictions generally.

Keywords

directors’ duties, proper purposes, shareholder enforcement rights

Discipline

Law

Research Areas

Corporate, Finance and Securities Law; Private Law

Publication

Modern Law Review

Volume

74

Issue

1

First Page

875

Last Page

903

ISSN

0026-7961

Identifier

10.1111/1468-2230.70004

Publisher

Wiley

Additional URL

https://doi.org/10.1017/S0020589325101346

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