Cambridge BA: Company Law Paper

Arcturus Ltd is a private company whose constitution includes an article stating: 'No shares shall be transferred without the prior written consent of the board of directors.' Helena, a 30% shareholder, enters into a written agreement with Marcus, an outsider, to sell him her shares for £500,000. Before the transfer is registered, the board unanimously refuses consent, citing a vague concern about 'strategic direction.' Helena argues the refusal is invalid because the directors acted in bad faith and for an improper purpose, having recently learned that Marcus intends to vote against their proposed management buyout. The board also relies on a shareholders' agreement signed by Helena three years ago which includes a right of pre-emption in favour of the other shareholders. Separately, Marcus claims he has an equitable interest in the shares from the moment the contract was signed and seeks to be entered on the register. Helena further contends that the shareholders' agreement is unenforceable as it conflicts with the articles. Advise Helena and Marcus on (i) the validity of the board's refusal of consent; (ii) whether Marcus has acquired any proprietary interest in the shares; and (iii) the interaction between the shareholders' agreement and the articles of association.

Solaris plc is a listed company engaged in renewable energy. Nadia is the Chief Executive Officer and a director, holding 2% of shares. The board is considering a £200 million acquisition of Windforce Ltd, a company in which Nadia's spouse holds a 40% stake. Nadia discloses this interest at the board meeting under s.177 CA 2006 but then participates fully in the board vote, which carries 4-2 in favour of the acquisition. The articles of Solaris plc are silent on whether interested directors may vote. Independently, Nadia, having learned of the intended acquisition before it is publicly announced, purchases 50,000 additional shares in Solaris plc in her own name. She argues this is permissible because the information was 'generally available' to sophisticated City analysts. The acquisition subsequently proves disastrous and Solaris plc loses £80 million. A shareholder, Kwame, holding 0.3% of shares, seeks to bring a derivative claim on behalf of the company against Nadia. Advise on: (i) whether Nadia has breached any directors' duties in connection with the acquisition decision; (ii) her potential liability under the market abuse and insider dealing regimes; and (iii) the prospects of Kwame's derivative claim.

Crestwood Ltd is a small private company with three shareholders and directors: Astrid (50%), Bertram (30%), and Clio (20%). The company's articles adopt the Model Articles. For three years, profits have been distributed informally as equal salaries rather than dividends, reflecting an original oral understanding among the founders that each would receive equal income regardless of shareholding. Following a falling-out, Astrid uses her majority vote to remove Clio as a director under s.168 CA 2006 and simultaneously reduces Clio's salary to zero. The company then pays a dividend proportionate to shareholding, entitling Clio to only 20% of the distributed profits. Clio has not been paid for six months. Astrid also causes the company to enter into a contract with her wholly-owned subsidiary, Northgate Services Ltd, at an above-market rate, without convening any board or shareholder meeting. Clio seeks advice on whether she has any remedies. Consider: (i) whether Clio can challenge her removal as a director; (ii) whether the conduct amounts to unfair prejudice under s.994 CA 2006; and (iii) any additional remedies available, including winding up.

Critically evaluate the extent to which the duty to promote the success of the company under s.172 of the Companies Act 2006 has transformed, or merely codified, the pre-existing equitable duty of loyalty owed by directors. In your answer, consider the significance of the 'enlightened shareholder value' approach, the role of the factors listed in s.172(1)(a)–(f), and the extent to which the courts have used s.172 to expand accountability for directors beyond its common-law antecedents.

To what extent does the doctrine of piercing the corporate veil remain a coherent and principled feature of English company law following Prest v Petrodel Resources Ltd [2013] UKSC 34? Critically assess the Supreme Court's reformulation of the doctrine and consider whether the 'evasion principle' articulated by Lord Sumption provides a satisfactory doctrinal foundation, or whether the courts have effectively abolished veil-piercing as an independent remedy.