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Deadlocked Companies – How to Break FreeBy Tamar Halevy
Quorum provisions in a company’s constitution can enable a shareholder to cause a deadlock in the company simply by his refusing to attend meetings. The Companies Act 2006 allows the court to come to the rescue in these situations, as the case of Smith v Butler illustrates.
Directors duties of loyalty and no conflict nor secret profit
A director was doing up his house and, in his personal capacity, hired equipment from a customer of the company. The Court of Appeal decided that he had breached his duties to the company and so he had to account to the company for his secret profit, even though the company had had no use for the equipment.