What is the ratio in Hogg v Cramphorn?

Directors cannot exercise their power to issue shares for the primary purpose of maintaining control over the company, even if they genuinely believe this serves the company's interests.

What did the court decide in Hogg v Cramphorn?

Buckley J held that the share issue was invalid because it was made for the improper purpose of maintaining directorial control rather than raising capital.

Why is Hogg v Cramphorn important for company law?

It established the fundamental 'proper purposes' doctrine that prevents directors from using their powers for unauthorized purposes, now incorporated into statutory directors' duties.

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