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Section 241 of The Companies Act No. 17 of 2015: Application for permission to continue claim as a derivative action

    

(1) If a member of a company applies for permission under section 239 or 240,the Court shall refuse permission if satisfied—
(a) that a person acting in accordance with section 144 would not seek to continue the claim;
(b) if the cause of action arises from an act or omission that is yet to occur–that the act or omission has been authorised by the company; or
(c) if the cause of action arises from an act or omission that has already occurred — that the act or omission—
(i) was authorised by the company before it occurred; or (ii) has been ratified by the company since it occurred.
(2) In considering whether to give permission, the Court shall take into account the following considerations:
(a) whether the member is acting in good faith in seeking to continue the claim;
(b) the importance that a person acting in accordance with section 143 would attach to continuing it;
(c) if the cause of action results from an act or omission that is yet to occur, whether the act or omission could be, and in the circumstances would be likely to be—
(i) authorised by the company before it occurs; or
(ii) ratified by the company after it occurs;
(d) if the cause of action arises from an act or omission that has already occurred—whether the act or omission could be, and in the circumstances would be likely to be, ratified by the company;
(e) whether the company has decided not to pursue the claim;
(f) whether the act or omission in respect of which the claim is brought gives rise to a cause of action that the member could pursue in the member's own right rather than on behalf of the company.
(3) In deciding whether to give permission, the Court shall have particular regard to any evidence before it as to the views of members of the company who have no personal interest (direct or indirect) in the matter.

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Disclaimer: This document is not to be taken as legal advise.

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