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CMA Intermediate · Business Laws and Ethics · Rights of Shareholders

Meru Ltd has 1,000 issued preference shares of a class. A variation of that class's rights was approved by a special resolution at a separate meeting. Which of the following sets of shareholders holds the right to apply to the Tribunal to cancel the variation under Section 48(2)?

Holders of 100 shares who did not consent or vote in favour can apply. Section 48(2) needs not less than ten per cent of the issued shares of the class, which is 100 of 1,000, and the applicants must be dissenters of that class.

  1. AHolders of 80 shares who did not consent to or vote in favour of the variation
  2. BHolders of 100 shares who did not consent to or vote in favour of the variationCorrect
  3. CHolders of 99 shares who voted in favour of the variation
  4. DHolders of 50 equity shares of the company

Explanation

Section 48(2) requires holders of not less than ten per cent of the issued shares of the class who did not consent or vote in favour. Ten per cent of 1,000 is 100 shares. 80 shares is below the threshold, those voting in favour cannot apply, and equity holders are not holders of that class.

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