Re Duomatic LW [1969] 2 Ch 365 is a shining beacon of pragmatic common law. The case lights a path through the murky legal landscape of administrative irregularities in company procedures. Members of a company may informally and unanimously agree to override procedures designed to protect minorities. For example, a public company may make written resolutions instead of special resolutions, despite there being no provisions for written resolutions by public companies in the Companies Act 1985.
The effects of Re Duomatic have been refined by Re Barry Artist Ltd [1985] 1 WLR 1305, where the court held that it was reluctant to allow a written resolution to replace a special resolution in the preparation for a reduction of share capital. Due to the specific circumstances of this case the court did allow the written resolution to be effective, but expressly stated that the case should not be followed. The reason given for this distinction was that the reduction of a company's capital, unlike the amendment of articles of association for example, is not a matter for the company alone - the court has discretion to confirm or refuse to confirm it (s.136 of Companies Act 1985). Nourse J pointed out, most pleasantly:
Why should the court confirm it if it is done in some other way, however effective it may be? Moreover, if the reduction is confirmed the minute cannot, as is at present proposed in this case, refer to a special resolution which has not been passed. It will have to refer to a written resolution of all the members, which is something which may cause confusion and uncertainty amongst those who are not versed in the niceties of company law.
More recently in this line of legal logic, Re Torvale Group Ltd - [1999] 2 BCLC 605 distilled the essence of Re Duomatic to be where the members of specified group (prescribed by statute or articles) require a prescribed procedure for certain courses of action, and those members all agree to the course of action, the prescribed procedure is no longer necessary.
It may be tempting to use the Re Duomatic principle to avoid the administrative burden of holding meetings or obtaining the proper prescribed resolutions. Such deliberate contravention of the rules could damage the reputation of the company, create difficulties for future investors and/or be part of a maladministration claim by officious shareholders. Corporate Blawg UK expects that the courts would not look favourably on deliberate uses of the Re Duomatic principle. However, the principle does exist and has been applied by the court on numerous occasions. Corporate Blawg UK would be interested to hear of any experiences of this principle being used prospectively?
I consider that this case was something especially difficult for the lawyers and even for the judge. Thanks for writing about some details that I ignored about it.
Posted by: Kamagra | 16 November 2010 at 09:10 PM
I flunked one year in my literary exams and could not believe it. I thought I was good at it. But after reading your article it has just been an utter inspiration. Now I shall keep the print out of the article along with me and I hope to do well. If I do so, I shall be happy and that would only be possible because of it.
Posted by: Kamagra Tablets | 21 January 2011 at 08:50 AM
i think we should be open to new developments and encourage people...
Posted by: gold coins uk | 10 February 2011 at 08:14 AM
It is so lucky to read your blog,it is full of useful message.I wish we both can do better in the future.It great honour if you can visit our website,and give us some suggession.
Posted by: Home Decor | 13 March 2011 at 12:38 AM
Great analysit of the company situacion about it. It is pretty sad that there are problem with the administration that It can't affect investors and even employees.
Posted by: Generic Viagra | 14 March 2011 at 06:08 PM
The reason given for this distinction was that the reduction of a company's capital, unlike the amendment of articles of association
Posted by: American Attorneys | 14 May 2011 at 10:59 PM
Wow, nice post,there are many person searching about that now they will find enough resources by your post.Thank you for sharing to us.Please one more post about that..
Posted by: xanax | 02 August 2011 at 03:23 AM
I liked this blog, i think is very interesting, most of all for the new ideas that this blog talk.
Posted by: levitra | 04 August 2011 at 02:52 PM
kiki viagra asdasdas viagra jkhkjh viagra 1232 viagra 1232 viagra 1232 cialis 1232 cialis 1232 1232 generic viagra 1232423423 cialis 1232 buy cialis dgdg buy cialis 56465 buy cialis 56465 viagra online asdjaksdn buy viagra asdj cheap viagra asdjaksdn buy viagra online asdjaksdn cheap viagra asdjaksdn buy cialis 64654 viagra cialis online ffsdsdf cialis online fsfsd cialis online sdfsdf cialis online fsdf cialis online http://www.viagra.gd http://www.viagra-discount.com http://www.viagra-1.us http://www.cialis.gd http://www.cialis.vc http://www.viagra-online.me.uk http://www.cialis-without-prescription.com http://www.generic-viagra.us http://www.viagraonline.us http://www.originalviagra.net http://www.viagra-no-prescription.com http://www.onlinecialis.biz http://www.generic-levitra.us http://www.propecia.bz http://www.viagrabuy.co.uk http://www.buyingviagra.us http://www.buyonlineviagra.us http://www.levitra-buy.us http://www.viagra-cheap.us http://www.viagracheap.us http://www.viagra-without-prescription.us http://www.viagrawithoutprescription.us http://www.viagraorder.us http://www.onlineviagras.us
cialis asdasdas cialis fssf cialis http://www.buy-cialis.org.uk http://www.cheap-cialis.me.uk http://www.cialisonline.me.uk
viagra online without prescription gdffdg viagra online without prescription dfgd viagra online without prescription gdffdg
gdffdg viagra hfgfg viagra
Posted by: viagra | 30 August 2011 at 08:43 AM
http://blogs.mk.ru/users/mlnvgeole/
http://blogs.mk.ru/users/mlnvgeole/post187477145/
http://blogs.mk.ru/users/mlnvgeole/post187477408/
http://blogs.mk.ru/users/mlnvgeole/post187477844/
http://blogs.mk.ru/users/mlnvgeole/post187478050/
http://blogs.mk.ru/users/mlnvgeole/post187478361/
http://blogs.mk.ru/users/mlnvgeole/post187478555/
http://blogs.mk.ru/users/mlnvgeole/post187478746/
http://blogs.mk.ru/users/mlnvgeole/post187478866/
http://blogs.mk.ru/users/mlnvgeole/post187478992/
Posted by: Kerasuhom | 05 October 2011 at 08:13 AM
Do you have more about the Re duomatic case ?
Posted by: xl pharmacy | 14 November 2011 at 01:39 PM
Drug Abuse Quizzes For Teens , http://www.cheaprogaineforsale.com/ - cheap rogaine without prescription During its use to treat high blood pressure it was found to increase the growth of body hair. http://www.cheaprogaineforsale.com/ - buying rogaine online
Posted by: AnaesyKen | 27 January 2012 at 09:26 AM
http://nsibayua78.ru.gg/
http://snomagesca.ru.gg/
http://emicosazus.ru.gg/
http://sevmainuge.ru.gg/
http://bemnasucge.ru.gg/
http://soamd-sai.ru.gg/
http://cusvenorians.ru.gg/
http://secungametab.ru.gg/
http://cemsudasion.ru.gg/
http://sigecsoma50.ru.gg/
http://ashirneuste.ru.gg/
Posted by: Twoedisauw | 02 February 2012 at 09:09 AM