. Instead, the majority may be obligated to demonstrate why the transaction was substantively fair to the majority, not why it was procedurally appropriate. According to the rule, decisions are based on the majority vote, unless otherwise provided for by law or the company’s articles of association. 3 Rationale for Majority Rule 3.1 Company Law Under company law, the default method of governance is by majority rule through an exercise of voting power by the members17 at general meeting. Majority rule definition is - a political principle providing that a majority usually constituted by fifty percent plus one of an organized group will have the power to make decisions binding upon the whole. ‘Majority rule’, is an established principle of company law whereby the majority of the shareholders hold the decision making power of the company. I. ‘Majority Is A Rule’, Says The National Company Law Tribunal In Tata-Mistry Case Home This rule establishes governance by the majority of those present and participating in a particular event. 1. Complete Majority Rule but Minority Protection - Majority Rule & Minority Rights, Company Law B Com Notes | EduRev chapter (including extra questions, long questions, short questions, mcq) can be found on EduRev, you can check out B Com lecture & lessons summary in the same course for B Com Syllabus. The general principle of company law is that every member holds equal rights with other members of the company in the same class. POSTAL RULE Contract law rule which makes an exception to the rule that acceptance can only occur… MAJORITY VOTING Also known as majority vote or the majority rule. On the surface, the principles of majority rule and the protection of individual and minority rights would seem contradictory. Therefore the legislator has chipped away at a fundamental principle of company law that majorities rule the company and no minority can interfere with their decision or lack of one. Even if they are yet to make a decision no minority shareholder can take that action because the proper person to do so is the company which is recognised as the majority shareholders. 2. Convenient, Affordable Legal Help - Because We Care! Majority rule is a means for organizing government and deciding public issues; it is not another road to oppression. The scale of rights of members of the same class must be held evenly for smooth functioning of the company. Related documents. In this article, we are going to study the Foss v Harbottle case, which introduced the concept of the rule of the majority. 'S procedure now allows a derivative claim now allows a derivative claim over the 10... Loyalty, and fairness, Book 1, democracy in America the most votes then represent the will the! 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