Company Law: Derivative Action Notes

Directors have duties under the CA 93, s 128 related to the management of the company.
These duties include good faith, loyalty (acting in the best interests of the company), and care.
Duties are owed within the Company structure: Shareholders -> Directors' duties.

Shareholders or former shareholders may bring an action against a director for breach of duty owed to them as shareholders.
Duties owed to shareholders:
- s 90: Duty to supervise the share register.
- s 140: Duty to disclose interests.
- s 148: Duty to disclose share dealings.
Duties owed to the company:
- s 131: Duty to act in good faith and in the best interests of the company.
- s 133: Duty to exercise powers for a proper purpose.
- s 135: Duty to avoid reckless trading.
- s 136: Duty not to agree to a company incurring certain obligations.
- s 137: Duty of care.
- s 145: Duty to not use company information.

If a right is enjoyed by the company alone, the proper plaintiff is the company, not the shareholder.
This embodies the principle of majority rule.
Shareholders can only exercise the company's right (derivative action) if the board could not have ratified the breach.
The board cannot ratify a