(company law) What is meant by the statutory contract, and what is its Essay

(company law) What is meant by the statutory contract, and what is its importance for company law - Essay Example The limitation in the rights of the members could be attributed to the rights of the other members and also in the company’s separate personality which could call for the best interests of the company or the will of the majority to take preference. As a result, the multifaceted nature of this â€Å"contract† has created a demand for an additional directive in this area. The Nature of the Statutory Contract Contracts could be commonly found between two parties, consequently rendering third parties to intermittently acquire rights. These parties would in turn possess communal obligations as well as prima facie and any infringement is subject to an action for damages.2 On the other hand, the company contract could also be taken into consideration as unique. It covers several members making it imperative to determine who parties to it are and when it could be imposed. The requirements of Section 14 do not distinguish the company as being party to the contract instead it takes no notice of its separate legal unit, and grants only that it is compulsory as if signed and conserved by each member. Consequently, the shareholders are bound to the company and, even though not statutorily given for, the company is also bonded by the Articles, to the member. Nonetheless, the shareholders could solely implement their rights qua members3, at the same time as the articles structure a contract involving members which is generally solitary enforceable by means of the company, this is with the exception of the of member posses personal right5. On the other hand it should be taken into consideration that an â€Å"outsider† right, for example one not connected to the â€Å"collective constitutional rights† could not be imposed7. The term â€Å"outsiders† could include people such as directors. There are concerns shed over the modification