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ACCA Applied Skills · Corporate and Business Law (Global) · The formation and constitution of a company

Liang is a member of Sable Ltd. Its articles give him a right to receive notice of general meetings, but the company fails to send it. Liang wishes to enforce the right. Which claim is available to Liang under the principle in Hickman v Kent Sheep Breeders?

Liang can sue as a member to enforce his right to notice, because the articles give enforceable rights to members in their capacity as members. Rights relating to other capacities, such as supplier or director, are not enforceable through the articles.

  1. AA claim in his capacity as a member, to enforce his membership right under the articlesCorrect
  2. BA claim as a supplier of goods to the company, based on the articles
  3. CA claim as a prospective director to enforce a right to office
  4. DA claim as an outsider, because articles cover third parties equally

Explanation

Hickman established that articles confer rights only on members in their capacity as members, such as receiving notice of meetings. Rights claimed in another capacity, such as a supplier or director, cannot be enforced through the articles. Liang's claim concerns membership.

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