The court was asked whether the articles of association created rights between the shareholders and the company, or simply between the shareholders inter se in respect of their rights as shareholders. The statutory provision was seen as creating the latter, but not necessarily the former.
Held: It is the constitution of a company which confers rights on members including the right to exercise votes attached to shares. Articles regulating the rights and obligations of the members generally do create rights and obligations between them and the company respectively. A company cannot unilaterally vary its contracts by altering its articles unless that is the basis upon which the contract was made. A provision of a statutory contract cannot be enforced unless it affects the member in his or her capacity as a member
References: [1915] 1 Ch 881, [1914-15] All ER 900
Judges: Astbury J
Jurisdiction: England and Wales
Last Update: 23 September 2020; Ref: scu.556806