ISSUE:
Whether the proper purpose rule could have been made applicable to the imposition of restrictions on the voting rights of Eclairs and Glengary?
Whether the imposed restriction was improper?
RULE:
‘Proper purpose rule’, applies to directors of English companies under s171(b) of the Companies Act 2006. This long-standing equitable rule, codified by the 2006 Act, requires that a director must only exercise powers for the purposes for which they were conferred.