marxism in the necklace - 1512 Words

Textual Analysis of â€Å"The Necklace† In â€Å"The Necklace†, Guy de Maupassant uses a woman’s life, and very important event in it, to depict the Marxism of his or her lifetime, especially amongst women. He uses comparisons and downfalls of her life to depict society’s shortcomings and beliefs of class. Marxism looks at the economic and social structures of a society and the draws attention to the struggles between the classes. A Marxist might believe that people are born as creations of economical or social positions. Born to a family of clerks, Mrs. Mathilde Louise was beautiful by looks, but felt as if she was not because she could not afford to dress well, eat well, or live well. She felt everything she had was ugly and until she was rich†¦show more content†¦She wants and is obsessed with what she believes she should have, but does not. She dream of being part of the rich society and in a way this necklace made her feel as if she was part of it. This piece of expensive and beautiful je welry showed social structure and classes and how they worked, but so did her actions, thoughts, and how she carried herself at the ball. When it was time for the ball Guy de Maupassant uses Mathilde to show Marxism again by the way she acts and carries herself. The story says She danced with delight, with passion, intoxicated with pleasure, thinking of nothing, in the triumph of her beauty, in the glory of her success, in a sort of cloud of happiness made up of all these tributes, of all the admirations, of all these awakened desires, of this victory so complete and so sweet to a woman’s heart. (Maupassant, 70). The ball itself was a peak into the life of the upper class and she thought that this was what the upper class life was about. In her mind the rich life was a big ball or party in a sense, people had depicted in her mind and made her believe this is what it is like. He depicted her as being in heaven almost in her dreams but it was real, for that small amount of time she could be who she had always wanted to be but the next day she was still married to a clerk schoolteacher. After the ball she realizes that she has lost the thing that brought her up to the upper class, the necklace. After the party MathildeShow MoreRelatedAnalysis of Guy de Maupassants The Necklace665 Words   |  3 Pagesa family of clerks. She had no dowry, no expectations, no means of being known, understood, loved, wedded by any rich and distinguished man, (de Maupassant). From the first line of The Necklace, the reader is prepared for a Marxist-feminist understanding of the protagonist. The overall theme of The Necklace does not so much undermine the structural inequities in Mathildes society, but points more to the futility of pursuing happiness through material wealth. Whereas her husband joyously exclaimsRead MoreEssay On Frida Kahlo1030 Words   |  5 Pagesreally didn’t represent god in her painting, she used With Thorn Necklace and Hummingbird. She painted herself with a thorn necklace which makes her neck bleed. The dead hummingbird is a symbol to the god of Tenochtitlan. Frida Kahlo attended the National Preparatory. Her and a group of friends wanted to show their sympathy for socialism and cultural nationalism. During the 1920s, she joined the Mexican Communist Party. In her artwork, Marxism will give health to the stick shows that Frida loved StainRead MoreMarxism in Titanic3038 Words   |  13 PagesCritical   Evaluation   of   Marxism   in   Titanic   Ã¢â‚¬â€œ   Stephanie   Kiewel   Ã¢â‚¬â€œ   Critical   Appraisal   Film   5010   Ã¢â‚¬â€œ   Dec.   2013       The   film   Titanic   used   to   be   the   most   successful   film   of   all   times.   The   romantic    disaster   movie   was   released   in   1997.   It   deals   with   both   the   historical   catastrophe    where   1,517   passengers   lost Read More Criticism of Capitalism in The Great Gatsby by Fitzgerald Essay1520 Words   |  7 Pagesas a move to subtly promote Socialism, an ideology in which value is placed on the inherent value of an object rather than its market value.   In a late collection of notes, Fitzgerald himself proclaims that he is essentially Marxist. [i]  Ã‚   Marxism is a specific branch of Socialist theory.   Fitzgerald makes Gatsby a novel that is not inherently Marxist or even Socialist, but one that is imbued with Marxist theory.   He does this by denouncing nonhumanitarianism, reification, and market valueRead MoreEssay on The Signalman by Charles Dickens3739 Words   |  15 Pageslargely anonymous throughout. Because they are anonymous, they become very mysterious due to the reader not becoming familiar with them. This is a skill used by Dickens to add to the overall mystery of the story. Durkheim suppressed sweetsugas marxism . The author uses many descriptive and vivid sentences and paragraphs to describe the setting and the signalmans initial reactions to the narrator, On either side a dripping wet wall of jagged stone. These sentences are good at bringing theRead MoreMagdalena Carmen Frida Kahlo Essay2077 Words   |  9 Pagesportraits after her divorce. Another example of Frida bleeding in her self portraits is Self Portrait Dedicated to Dr Eloesser, 1940 [figure 6]. She is surrounded by dead foliage, with a necklace of thorns. The thorns pierce through her neck, causing blood to spill. The next example is the Self Portrait with Thorn Necklace and Hummingbird [figure 7]. This painting holds many aspects which are symbolic to Frida Kahlo, she uses these symbolic elements to express her feelings. Such as the hummingbird, whichRead MoreCRM 1301 Midterm uOttawa Carolyn Gordon Essay10218 Words   |  41 Pageswho demand reform were branded as enemies of God followed by accusation of witchcraft. Those who spoke out wore the mask of shame. Husbands were ordered to beat their wives out of charity for their soul. Those who sleep in church wore the rosary necklace. Other faces the ducking stool. Guilt and sin were a part of Christian life. Sexuality was the root of evil and women were obstacle to a man’s holiness. St Thomas Aquinas: Greatest pleasure for the blessed ones in Haven was watching torturesRead MoreGeorge Orwell23689 Words   |  95 Pagesbrought a few able men like Bevin to the front, but in general we are still commanded by people who managed to live through the years 1931-9 without even discovering that Hitler was dangerous. A generation of the unteachable is hanging upon us like a necklace of corpses. As soon as one considers any problem of this war – and it does not matter whether it is the widest aspect of strategy or the tiniest detail of home organization – one sees that the necessary moves cannot be made while the social structure

The Impacts of Science on Human Life Essay - 595 Words

Technology is evolving and scientists are frequently developing new concepts and theories, improving our life style and making the world ultimately a better place to live in. Science has led to many extraordinary inventions, filling our human mind with vast amount of knowledge and intelligence. For example, many types of new planets have been discovered recently. Although people have been living in the world for a very long time, it is quite recent that these planets have been discovered using telescope and other mechanisms. These newly found planets are identical to earth and believed to be supporting life, which I have found interesting. However, without the contributions of technology, it would have never been possible. Moreover,†¦show more content†¦For example, Malaysia was not a very wealthy country economically but the improvements of technology have helped their financial system in a quite extensive level. In the past, they were not stable in a financial system until the effects of complex machinery and the contributions of modern technology have rationalized their economy. In the essay, The Enchanted Forest, Bill Reid, the author, also supports this point by saying, â€Å"We all carried ashore with us the knowledge that the wave of technological assault that had begun on the other island and changed most of the continent†(Reid 319).Basically, Bill states that how technology has changed most of North America several ways. In addition, this quote is related to the essay because it illustrates how impotent science and technology is, in terms of rationalizing our economy. In view of these aspects, I would say most people would agree that it has indeed made our world a better place. Most importantly, the contributions of science and technology have made our lives more delightful. In our everyday life, we use many ordinary things, which have been modified through improvements. These simple inventions have modernized the way we do things given that most people are generally depended upon them. For example, a cell phone is considered as an important item due the service it provides. In the past, when cell phone was not invented, people had to go all the way to the person’s place in order to deliver theShow MoreRelatedHow Humans Can Have Negative Or Positive Impacts On The Life Cycle Of Animals And Doing Science2140 Words   |  9 Pagesinteractive Science lesson to get his students engaged in learning and doing Science. My CT told me that he did not have a specific book to teach with, yet he had essential questions and standards that needed to be met in Science. The lesson was centered on the 3rd grade Colorado academic standard 2, concept 2, which pertain ed to the concept of the duration and timing of life cycle events in different organisms. The essential question of how humans can have negative or positive impacts on the life cycleRead MoreImpact Of Technology On The Development Of Civilization1407 Words   |  6 PagesIn contemporary society, science has played a more pivotal role than technology in the development of civilization. The purpose of science is to develop a vast breadth and depth of data and knowledge to enable us to understand why things are the way they are (Oberdan 26). On the other hand, technology is used to improve real problems based on justified beliefs and organizational systems (Oberdan 28). Without the knowledge and understanding of science, innovation would be lessened and society wouldRead MoreComparative Studies of Bladerunner and Frankenstein1157 Words   |  5 Pagesinsights into the human experience. Every text is a product of its time. 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His approach focused on the state of theseRead MoreEssay on The Importance of Literature vs. Science1196 Words   |  5 PagesImportance of Literature vs. Science If we lived in a world without literature, learning only the sciences, would we be the same people? Does the human race need literature at all, does it have any worth whatsoever except as entertainment? Do people actually learn from literature? These are all questions that divide the human race into two separate sections, those who believe in the power of literature, and those who see it as impoverished compared to the social sciences in its ability to teachRead MoreReligion: Christian Science1395 Words   |  6 PagesChristian Science is an idealistic and most radical form of transcendental religiosity. The study of Christian Science teaches a feeling of understanding of Gods goodness and the differences between good and evil, life and death. The purpose of this paper is to address how the study of Christian Science helps us better understand the impact of globalization in America, as well as the impact of American on globalization. This paper is important because globalization features a dominant worldviewRead MoreNas The Water Cycle And The Climate Impact On Humans1064 Words   |  5 PagesHave you ever imagined seeing inside a hurricane? Would you like to be able to predict the water cycle and the climate impact on humans? NASA has made these opportunities possible through decades of hard work. NASA has developed rockets, Mars rovers, and earth obser ving satellites. Their main objective, to serve the American public, will improve the quality of life on planet Earth, which in turn will strengthen the American Economy. Encouraging economic activity creates jobs and helps generate tangibleRead MoreScience Denial Endangers Progress1247 Words   |  5 Pageshistory of scientific research, deniers of science have been one of the biggest obstacles for progress to overcome. Case after case, we have seen religion, misinformation, and ignorance stifle the efforts of those who wish to progress the human race forward. For instance, Galileo was found â€Å"vehemently suspect of heresy† by the Catholic Church for his ideas about the earth’s position in the universe and was thusly imprisoned, halting his research. This sort of science denial still occurs today. The denialRead MoreEssay On Overpopulation1140 Words   |  5 Pagesable to provide the quality of life due to the decline of resources can create a war and an unbalanc ed world. There is no way this should be allowed to happen without a plan of action for the future due to the impact. Just because we can reproduce does not mean we should go overboard with it as well as we do not need to accept in this country all migrants. The overpopulated world will soon suffer from this impact due to the lack of food, energy, and jobs. There is no life without a food source, we needRead MoreThe Impact of Computer Science on Health Care Medicine1283 Words   |  6 PagesThe Impact of Computer Science on Health Care amp; Medicine Abstract Computer science can be defined as the systematic study of algorithmic processes, their theory, design, analysis, implementation and application. Its functions in the modern society today expand far beyond the uses one could even begin to imagine. Specifically, there is an increased influence in its practical application in the field of medicine. In recent times, an interdependent relationship between medicine

Management Accounting Business Responsebility Centers

Question: Describe about the Management Accounting for Business Responsebility Centers. Answer: Introduction A significant aspect of decentralised companies is responsibility centres. These centres are analysed on the grounds of different accounting figures like ROI, standard cost or divisional profit. One purpose of the management accounting mechanism is hence to tie a dollar value to transactions amidst various responsibility centres. Transfer price fits here as it is the price charged by companys one division from the other for the goods transferred to the latter (Holtzman and Nagel, 2014). The present report discusses transfer pricing, its different types and its use at length. Part A Transfer Pricing Defined In its essence, transfer pricing is a model of selling a product from one business unit or division of an organisation to other. Transfer price is basically the value charged for intra-company goods that the organisationalgroups purchase from one another. Coordinating the management of both the buying and selling decision is one of the primary purposes of transfer pricing. It is not essential that any money changes hands between the concerned segments (Schuster, 2015). The transfer price may just be utilised for the purpose of internal record keeping. It is revenue for the centre selling the products and expense for the one buying the products. The product which is transferred can be categorised on two measures. The first on is whether or not the product has a readily available outer market price. The second is whether or not the buying segment will sell it in the same form or will it turn into an input for the marketing divisions own manufacturing process (Ceteris, 2010). Purpose of Using Transfer pricing The below-mentioned reasons are the primaryobjectives of establishing transfer pricing scheme Yield separate revenue figures for every business unit and hence analyse the performance of every unit separately (Fernandes, Pinho and Gouveia, 2015). Assist in the synchronisation of manufacturing, pricing and sales decisions of the distinct business units. Through transfer prices, managers become aware of the value that their services and products carry for other divisions of the entity (OECD, 2009). It enables the firm to produce profit or cost data for every segment separately. Transfer price not only impacts the recognised profit for every division but also influences resource allocation. When transnational corporations move goods across international boundaries, transfer rates are appropriate in the computation of income taxes and are at times pertinent to legislative issues and global trade (Wittendorff, 2010). Different Types of Transfer Price Transfer at cost Entities employing transfer at cost method acknowledge that sales by global associates add to business profitability by yielding economies of scale in local manufacturing systems. This pricing method enables minimum duties. The firms making use of this approach do not expect a profit on transfer sale; instead, their expectation is related to their partner generating revenues by eventual sale (Drury, 2008). This transfer pricing method is used because companies presume that low costs will result in better performance of the partner, which eventually profits the whole company. Cost-plus pricing Organizations adopting the cost-plus pricing system believe in showing the profit accruing from any service or product at each stage of its movement through the company and its subsidiaries, business units or affiliates. This approach may lead to a price which may not be competitive or related to the demand in global markets. This is a widely used method because the management needs a projection of the long run marginal cost to make decisions (Chand, 2015). Market-based price This is obtained from the priceneeded to stay competitive in the global marketplace. This limitation in this method is cost. Nonetheless, there exists a significant amount of difference in the way cost is characterised. As with volume, cost usually reduces, a choice needs to be made between existing or planned levels of volume as the basis of pricing (Bakker, 2009). For employing this approach to penetrate a market which is very small with the intention of supporting local production, third nation sourcing might be needed. This allows the organisation to set up its franchise or name without having to invest in a physical set up. This is also suitable for a perfect market, where the products are homogeneous with the same price for both buyers and seller and no selling or purchasing costs. Adopting market-based transfer pricing in such a market matches the standards of a sound transfer price i.e. it will preserve divisional independence, will endorse consistent goal decisions and offer a consistent basis to evaluate performance (Muhammadi, Ahmed and Habib, 2016). Negotiated Transfer PricingIn this case, the company does not outline the rules for determining the transfer price. Business unit managers are motivated to negotiate a reciprocally satisfying transfer price. This approach is basically merged with free sourcing. However, in certain organisations, the head office holds the right to arbitrate the process of negotiation and enforce an adjudicated solution (Drury, 2008). In a market which is imperfect, transfer prices established at the planned or current market price do not tend to be the most favourable. In such situations, it is suitable to follow the negotiated approach. In cases of unused capacity, the range of transfer price negotiation usually falls between the maximum rate the buying segment is ready to pay and the minimum price at which the selling division is ready to sell (Rossing and Rohde, 2014). Part 2. (a) Transfer prices are based on total actual cost and not appropriated as the basis for divisional performance measurement because: As it do not leads to an optimal decision for the company. It provides small amount of incentive for sales department to control manufacturing costs as all the cost incurred will be recovered. (b) Calculation of contribution margin Data available: Particular Cleaning and Scrapping Division Processing Division Transfer price from cleaning and scrapping 0 77 Direct Material 18 5 Direct Labour 12 10 Manufacturing Overhead 40 25 Total direct cost 70 117 Calculation of variable manufacturing overhead Particular Cleaning and Scrapping Division Processing Division Total Manufacturing Overhead 40 25 75% variable in cleaning scrapping dept. 30 40% variable in processing division 10 Calculation of total variable cost Particular Cleaning and Scrapping Division Processing Division Transfer price 77 Direct Material 18 5 Direct Labor 12 10 Variable Manufacturing Overhead 30 10 Variable Selling cost 5 0 Total variable cost 65 102 Calculation of selling price Particular Cleaning and Scrapping Division Processing Division Price at which it can be sold in open market 95 160 Total selling price 95 160 Formula for contribution margin = Selling Price Product variable cost Selling Price Contribution Ratio Particular Cleaning and Scrapping Division Processing Division Selling Price 100 160 Variable Cost 65 102 Contribution Margin 35 36.25 (c) Calculation of price range Normal markup per unit Particular Cleaning and Scrapping Division Processing Division Variable cost per unit 60 102 Fixed Overhead per unit 10 15 Variable selling cost 5 0 Total cost 75 117 Normal markup per unit 20 43 Market price per unit 95 160 Production capacity 400000 400000 Price range for cleaning and scrapping division As per the economic transfer pricing rule the minimum price is the marginal cost and the maximum price is fixed by the receiving department. $65 - $ 95 Price range for processing division As explained above regarding the rule of economic transfer pricing the minimum price will be calculated and the maximum price will include margin also. $75 - $160 (d) As the division is having an opportunity to sell goods externally instead of selling it to other department. The minimum transfer price would be cost plus their profit margin. In present case the normal profit markup is 10% of the cost. Calculation of lowest transfer price acceptable to cleansing scrapping division according to general transfer pricing rule Particular Cleaning and Scrapping Division Variable cost per unit 60 Fixed Overhead per unit 10 Variable selling cost 5 Total cost 75 Normal markup per unit 7.5 Market price per unit 95 Production capacity 400000 The selling variable cost will be included in case the goods are to be sold externally and not while selling goods to another division; as no selling variable cost is paid in that case. Conclusion In vertically integrated firms, there are mainly two segments, a manufacturing and a buying division. In such companies, there is a regular exchange of goods and services among their departments to facilitate business operations. Transfer pricing is hence, the internal prices of goods developed with two main purposes: coordination (to arrive at decisions most appropriate for the business), and profit allocation (for assessing segment profits and to measure performance. The paper also discussed the different types of transfer prices (Lin and Chang, 2010.). From the different types of transfer pricing techniques, the cost based approach is the most widely used and is followed by the market-based approach. Transfer pricing also becomes suitable in respect of legislative issues such as global trade disputes etc. References Bakker, A., 2009. Transfer Pricing and Business Restructurings: Streamlining All the Way. IBFD. Ceteris., 2010. Guide to International Transfer Pricing: Law, Tax Planning and Compliance Strategies. Kluwer Law International. Chand, S., 2015. 5 Types of Transfer Pricing Methods used in International Marketing. [Online]. Available through:https://www.yourarticlelibrary.com/product-pricing/5-most-important-types-of-transfer-pricing-methods-used-in-international-marketing/5820/. [Accessed on 16th September 2016]. Drury, C., 2008. Management and Cost Accounting. Cengage Learning EMEA. Fernandes, R., Pinho, C. and Gouveia, B., 2015. Supply chain networks design and transfer-pricing. The International Journal of Logistics Management, 26(1), pp.128 146. Holtzman, Y. and Nagel, P., 2014. An introduction to transfer pricing.Journal of Management Development, 33(1), pp.57 61. Lin, C. and Chang, H., 2010. Motives of transfer pricing strategies systemic analysis. Industrial Management Data Systems, 110(8), pp.1215 1233. Muhammadi, H. A., Ahmed, Z. and Habib, A., 2016. Multinational transfer pricing of intangible assets: Indonesian tax auditors perspectives. Asian Review of Accounting, 24(3), pp.313 337. OECD., 2009. OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2009. OECD Publishing. Rossing, P. C. and Rohde, C., 2014. Transfer pricing: aligning the research agenda to organizational reality. Journal of Accounting Organizational Change. 10(3), pp.266 287. Schuster, P., 2015. Transfer Prices and Management Accounting. Springer Briefs in Accounting, 10. Wittendorff, J., 2010. Transfer Pricing and the Arm's Length Principle in International Tax Law. Kluwer Law International.

The Common Law Derivative Action in Hong Kong Essay Example

The Common Law Derivative Action in Hong Kong Essay School of Accountancy ACY 3151 D– Company Law Preserve The Common Law Derivative Action in Hong Kong Presented to Professor C. K. LOW Submitted by Tony BAI Dongyi; Ashley CHEN Xi; Ri REN Xinyu; Zoe ZHOU Beinan 30 April 2010 Abstract This paper is a response to the First Phase Companies Ordinance Rewrite Consultation Paper Question 7 whether we should abolish the common law derivative action (the CDA) currently retained by sec. 168BC (4) in the amended Companies Ordinance (2004). This paper firstly briefly introduces the current co-existence of the common law derivative action and the statutory derivative action (the SDA) and figure out potential problems which lead us to think about whether we should abolish the CDA. The main part of this paper discusses five arguable aspects from both the con sides and the pro sides of whether abolishing the CDA. This paper discusses the CCASS system which disables many shareholders to use the SDA; the rights f minority shareholders of offshore companies who cannot use the SDA; the international context regarding the CDA in many other common law jurisdictions; the potential confusions and complications with and without the co-existence and some pitfalls of the CDA which are minor and can be ignored. On the discussion of the above five aspects, the authors find that the CDA overrides the SDA in respect of each issue at the current time in Hong Kong, therefore this paper reaches a conclusion that Hong Kong should preserve the CDA at the current stage. We will write a custom essay sample on The Common Law Derivative Action in Hong Kong specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on The Common Law Derivative Action in Hong Kong specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on The Common Law Derivative Action in Hong Kong specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Upon the disagreement of the abolishment of the CDA, the authors also provide some further recommendations to help improve the current situations regarding the co-existence of the CDA and the SDA. TABLE OF CONTENTS Abstract2 Table of Contents3 1. Introduction5 1. 1 The Facts of Foss v Harbottle Case5 1. 2 The Rules of Foss v Harbottle Case5 1. 3 The Common Law Derivative Action6 1. 4 The Drawbacks of the Common Law Derivative Action7 1. 5 Introduction of SDA into Companies Ordinance7 1. 6 Problems of the Co-existence of the CDA and the SDA8 2. Five Aspects Regarding the Co-existence of CDA and SDA9 2. 1 The CCASS System9 2. 2 Members of Offshore Companies11 2. 3 The International Context of Derivative Action13 2. 4 Confusions and Complications Arisen without CDA15 2. 4. 1 General Discussion16 2. 4. 2 The MDA May Not Continue to Work17 2. 5 Other Drawbacks of the CDA Can be Ignored at the Current Stage18 3. Hong Kong Should Preserve the CDA19 4. Further Recommendations20 4. 1 Slight Amend sec. 16820 4. 1. 1 Extend the Scope of Qualified Plaintiff of the SDA20 4. 1. 2 Only Keep the CDA for Shareholders of Offshore Companies20 4. Require Offshore Companies to Accept Hong Kong Statue20 4. 3 Similar Legal System in the Region20 5. Conclusions22 Bibliography23 1. Introduction Before we discuss whether we should abolish or preserve the common law derivative action in Hong Kong, we would like to briefly introduce the background of the leading case (Foss v Harbottle) which established the principles of the common law derivative act ion as well as the pitfalls of it. Then we will mention the statutory derivative action which was the statutory regime introduced to deal with these pitfalls of the common law derivative action. At last we present the problems faced by the co-existence of these two derivative actions which lead to this paper’s main topic whether we should abolish or preserve the common law derivative action. 1. 1 The Facts of Foss v Harbottle Case Victorian Park Company was set up to develop parks and gardens. Harbottle was one of the eight promoters of this company. Foss was one shareholder, who brought a law suit alleging that the promoters sold a land to the company at a very high price. But Harbottle argued that Foss, the plaintiff, could not represent the Company to sue the promoters. 1. 2 The Rules of Foss v Harbottle Case[1] The judges in Foss v Harbottle held that the courts should not interfere in the internal management of companies. Because the company is a separate legal entity, if something wrong is done to the company, only the company itself can sue and that is the so called Proper Plaintiff Rule. The effect of this rule is to eliminate vexatious litigation by troublesome minority shareholders. However, the rule was also criticized by many researchers. If the directors of the company do something wrong, they will of course not have the incentive to make the company bring law suits against themselves. Therefore the minority shareholders cannot have the rights to get the wrongdoers to pay remedies to the company and it is to some extent unfair. Due to this reason, later, four exceptions to the rule were established to try to solve this problem. It is held that the Proper Plaintiff Rule will not apply if the relevant transaction †¢ ? is ultra vires or illegal; †¢ ? requires the sanction of a special majority; †¢ ? infringes the personal rights of a shareholder; or †¢ ? amounts to a fraud on the minority. 1. 3 The Common Law Derivative Action The exceptions to the Proper Plaintiff Rule in Foss v Harbottle allow the minority shareholders under some limited conditions to sue on behalf of the company. The common law derivative action (the CDA) is applied based on these exceptions. There are two basic requirements for applying the CDA: †¢ The alleged wrong or breach of duty cannot be ratified by a simple majority of the members; †¢ The alleged wrongdoers are in control of the company, so that the company cannot sue by itself. 1. 4 The Drawbacks of the Common Law Derivative Action Although the exceptions to rules in Foss v Harbottle open a door for the shareholders to take derivative actions, there are still some drawbacks in the CDA which make it not so effective to protect the rights of the minority shareholders. Just like the Australian Senate Standing Committee stated in its Report: Despite a recent tendency towards relaxation, the narrow rules of standing make it difficult for a shareholder to take legal action. There are some obstacles that confront shareholders in bringing litigation in CDA. These obstacles include: †¢ ? There are some defects in exceptions to the rule in Foss v Harbottle; †¢ ? The expense of litigation is very high; †¢ ? It is very difficult for shareholders to obtain information from the company. These drawbacks will be discussed more detailed in later part of this paper. 1. 5 Introduction of SDA into Companies Ordinance Because the CDA have the above pitfalls and cannot adequately protect the rights of the minority shareholders, the SDA was introduced in many common law jurisdictions. For example, SDA was introduced to Singapore and New Zealand in 1993 and Australia in 2001. In Hong Kong, SDA was also written into Companies Ordinance in 2005. Unlike CDA, the court will consider the good faith of the shareholders and the best interests of the company instead of those exceptions to the rule in Foss v Harbottle. In addition, the ratification by a general meeting will not stop the derivative proceedings which mean the hurdle to apply the SDA is relatively lower than that of the CDA. 1. 6 Problems of the Co-existence of the CDA and the SDA Many jurisdictions abolished the CDA after introducing the SDA, for example, Australia, Canada, New Zealand and the UK[2]. But Hong Kong currently reserves the CDA. The co-existence of the CDA and the SDA may cause some problems such as confusions and complications and this was concerned by the Court of Final Appeal in Waddington case in 2008. This directly leads to the Question 7 in the Consultation Paper. In the following session the authors will discuss the potential problems caused by the co-existence and rationally pro ve that indeed these potential problems should not be the reasons to deprive the shareholders of the rights to apply the CDA in Hong Kong because these potential problems are overridden by the benefits brought by the CDA. . Five Aspects Regarding the Co-existence of CDA and SDA In this part the authors will focus on five aspects regarding whether or not abolishing the CDA. In each aspect the authors will compare and analyze both the reasons to abolish and preserve the CDA and rationally prove that the CDA should not be abolished in respect of all the five aspects. 2. 1 The CCASS System Under Section 168BC (Members may bring or intervene in proceedings) (1) of Companies Ordinance, it states clearly that only members of a company can bring a SDA on behalf of company. However, there is no clear requirement whether the plaintiff has to be a member in order to bring a CDA, and the judge is granted discretion to decide. Therefore those shareholders who are not members can still bring a lawsuit on behalf of the company under the CDA. Hong Kong at the current stage still uses the CCASS system for the stock exchange under which the vast majority of shares owned by the public are not held by themselves, but actually held in nominee account which means those shareholders indeed are not registered to be the members of a company even they invest their money and buy shares of that company. 3] Therefore they are not qualified to apply the SDA under sec. 168BC (1). Moreover the nominees who are often huge financial institutions and are custodians of huge numbers of shares from a lot of shareholders may not have the incentive to bring the lawsuit for some minority shareholders. Further even one shareholder wants to suit the directors on behalf of the company ot her directors may not want to do this therefore the nominee may not be authorized to take derivative actions just because one shareholder’s requirement. Then the shareholder may have to withdraw the shares and again deposit them into the CCASS System which is very troublesome in practice and is a waste of money and time. The lag of time is a major concern because it is a great obstacle for the shareholders to take timely action. What is even worse, it is often the case that when the shareholders have the incentive to take such actions the company is already in a difficult financial position and the SFC may block the transaction and register of the shares of the company. Hence the shareholders once withdraw the shares he or she may not be able to deposit them again since the block set up by the SFC. Therefore it is almost very unlikely for a minority shareholder who is not a member of the company to take the statutory derivative action against the directors under the current version of amended Companies Ordinance (2004) and the practical CCASS System. However as stated above the CDA does not strictly require that only members can be qualified to apply. Therefore CDA is a much more feasible proceeding for Hong Kong shareholders than the SDA and actually CDA is almost the only feasible way for the minority shareholders of the listed company to take action (Non-listed companies and private companies do not use the CCASS System to exchange shares). Indeed we observe that from July 15, 2005 when the SDA came into effect most cases applying the SDA are related to private companies which support the opinion the CDA is still very important for shareholders of listed companies. Upon the above discussion the authors reach the conclusion that since the shares of the listed companies are exchanged using the CCASS System and the current SDA is only applicable to members, Hong Kong now should still preserve the CDA. 2. 2 Members of Offshore Companies As will be discussed later in this paper, one of the most important reasons to keep CDA is that it protects the Hong Kong shareholders of companies which are registered outside Hong Kong but have no places of business in Hong Kong in essence offshore companies. However, many people think this is not an effective protection because the procedure is too complicated that it is highly unlikely for small shareholders to take such an action. The right to perform CDA is theoretically feasible but is highly unlikely in reality. Following flow chart shows simply how a shareholder of an oversea company could take action: [pic] First he should go to the Hong Kong court, ideally, get the order. Then the order will be taken to register at a court in Singapore. If that court allows enforcing the Hong Kong order, then they issue another order to enforce it on the company. This might not be the end of the story; the remedy is given to the company, so it is subject to the company’s management’s decision whether to distribute it to the shareholders or not. Again this decision will be made by those directors who are sued in the case and they may not be willing to do so. Therefore this CDA is unlikely to be taken by small shareholders to spend huge cost in exchange of the remedy or no remedy at all. However this cannot constitute the reason to simply abolish the CDA. The CDA is difficult to apply however it is the only way for those shareholders of the offshore companies to protect their rights. To illustrate this section 2 of the Companies Ordinance is reproduced here â€Å"Specified Corporation† means a Hong Kong company or a non-Hong Kong company. (Added 30 of 2004 s. 2)[4] and s168 BC (1) only allows the members of specified corporations to take SDA. As mentioned above, there are a large number of companies (Around 80% according to the HKEX) incorporated outside Hong Kong but with Hong Kong shareholders. It can be inferred that amongst those huge number of companies many have no place of business in Hong Kong, which are neither Hong Kong companies nor non-Hong Kong companies within the definition of specified corporation. Therefore these offshore companies do not qualify under sec. 2 hence sec. 168 BC (1) cannot apply. Analyzing sec. 2 and sec. 168 it is established that shareholders of offshore companies can only apply the CDA because the CDA does not have similar restrictions. The CDA is the only way to help minority shareholders in overseas company therefore Hong Kong should preserve the CDA. The authors recognize that the CDA has high huddle to prove, high costs to incur and complex procedure to apply. However shareholders of offshore companies can only use CDA and we should not deprive the right to use CDA just because that it is complex to use. That is not the purpose of legislation and the spirit of law to develop a fair society. After all, complexity to get the remedies is much better than no way to get the remedies. The CDA can preserve the ability of the members of foreign companies to bring a derivative action in Hong Kong. The rights of these Hong Kong shareholders of such offshore companies to bring a CDA as one more option to defend their own interest may be deprived once CDA is abolished, thus CDA cannot be enforceable in the courts of Hong Kong in any events which is not fair to them. Moreover the existence of CDA also provides a deterrent force to proposed offenders such as offshore companies’ directors seeking for self-interest. 2. 3 The International Context of Derivative Action The judgment given by Ribeiro PJ in the Waddington case might be the most direct fuse for this issue (para. 32)[5]: The co-existence of both the statutory and common law regimes is unusual in an international context and is a source of confusion and complication. It would appear to be appropriate for the statutory regime to replace the common law derivative action altogether. This question deserves to be addressed by the Administration and the Legislature as soon as possible. He addressed that the co-existence is unusual and might raise confusion. This concern is further addressed in the consultation paper. The discussion here then will start with these points in 2. 3 as well as 2. 4 and expand to the inherent weaknesses with CDA in 2. 5. As is mentioned by Ribeiro and the consultation paper, it is unusual in an international context for both the SDA and the CDA to co-exist. So that practices in other jurisdictions where common law applies are reviewed as a reference. Actually, in contrast to Hong Kong, many jurisdictions replaced the CDA after the introduction of SDA. [6] [pic] Take New Zealand as an example, in its s 165(6) Company Act 1993, it regulates: Except as provided in this section (this section refers to section 165 which deals with statutory derivative action), a shareholder is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or a related company. [7] Apparently, the CDA is excluded. However the authors further notice that all above countries are representative ones in terms of developed western countries. The fact that many common law jurisdictions abolish CDA cannot prove the reasonableness of the abolition. This just represents what the situation is in western countries but not represent what we should do in Hong Kong. We should notice that HK has very different economic and political environment as those western jurisdictions and cannot just copy what they do. Thus people cannot suppose this of great value of reference for Hong Kong. Therefore Singapore and Malaysia may be of much more value when considering whether or not abolishing the CDA after introducing the SDA. These three common law jurisdictions have many similarities. All these three are in the Southeast Asia whose economy took off during 1970s and then the structure of the society changed and attention are more focused on developing financial centre and attract more foreign direct investment. Foreign companies are welcomed to be listed in the stock exchanges and local residents get involved in these financial transactions. The economy in these three jurisdictions is now facing similar pressure and the protection of minority shareholders’ is of great importance in order to make the public confident n the financial markets and the economy. Similar stock exchanges, similar financial positions and similar fiscal policies make it valuable to consider what Singapore and Malaysia does in terms of the derivative action when consider the legislation in Hong Kong. Both Singapore and Malaysia preserves CDA after introduction of SDA. Take Singapore as an example it adopted the SDA in its Com panies Bills sec. 216 A and sec. 216 B in 1993 however it still keeps the CDA and only regards the SDA as an addition to the CDA to make the sets of derivative actions complete. [8] Different jurisdictions should consider their own specific situations and only refer to other jurisdictions of the same economy and political situations to establish or revise for the most effective legal system. Regarding to Singapore and Malaysia, as well as the unique situations of Hong Kong to build an international financial centre, the CDA should be preserved at this stage to make sure each investor can be granted sufficient right to protect their investment and make sure that Hong Kong has healthy financial markets and regulated companies’ behaviors. 2. 4 Confusions and Complications Arisen without CDA The second claim made by the CFA in Waddington case is that the co-existence of the SDA and the CDA is a source of confusions and complications. [9] The as was addressed in the Consultation Paper in 2003, the CDA and the SDA differ not only in terms of form, but also in substantive issues. Under SDA, a member could, with leave of court, take the company to the court. According to s168BC (3), grant of leave requires: the action appears prima facie in the interest of the company; a serious question to be tried; the company is actually not acting; and there is a written notice. On the other hand, under CDA, the exceptions to the Foss rule must be proved. Where ultra vires acts, special resolution, infringement of rights, fraud on minority must be proved and satisfied. In addition, the effects of ratification by the board of directors also differ. The most confused part might be that the company is the plaintiff under SDA whilst a defendant under CDA. Some scholar mentioned in his work that: The retention of common law may even create the uncertainty and confusion as to what constitutes the lex fori. [10] Recall that in New Zealand, the CDA is abolished. B. Matthew argued that one of the intentions is to avoid confusion which was raised in an early Canadian case Rogers v Bank of Montreal. : To avoid the uncertainty of whether a derivative action may be brought under the oppression remedy as well as via the statutory leave procedure, and whether the statutory leave requirement acts to the exclusion of actions under one of the exceptions to Foss v Harbottle. [11] However the authors do not regard the above confusions will be sufficient reasons to abolish the CDA. The following are the arguments of some general discussions. 2. 4. 1 General Discussions The co-existence arrangement of the CDA and the SDA has been in place for about 5 years since July 2005, it has not caused any major legal problems. It has never been a source of confusion and complication. Besides, Section 168BC (4) states that the SDA provisions â€Å"shall not affect any common law right of a member of a specified corporation to bring proceedings on behalf of the specified corporation†. 12] In other words, unlike the law in other jurisdictions which abolishes the CDA, the Bill allows the co-existence of the CDA and SDA. This has been done because Hong Kong is unique in the sense that there are a large number of companies incorporated outside Hong Kong, but with Hong Kong shareholders. And there are also safeguards in the Company Ordinance to prevent duplicative CDA and SDA under section 168BE and section 168BC (5) which are reproduced as following. Section 168BE: Where leave has been granted to a member of a pecified corporation under section 168BC(3) and the member, in the exercise of any common law right, subsequently brings proceedings on behalf of the specified corporation in respect of the same cause or matter, or subsequently intervenes in the proceedings in question to which the specified corporation is a party, the court may— (a) order to be struck out or amended any pleading or the indorsement of any writ in the proceedings brought under the common law, or the intervention under the common law, or anything in such pleading or indorsement; and (b) order the proceedings brought under the common law, or the intervention under the common law, to be stayed or dismissed or judgment to be entered accordingly. Section 168BC (5): The court may dismiss an application for leave under subsection (3) if the applicant has, in the exercise of any common law right. [13] This shows that in 2004 when amending the Companies Ordinance, the legislator had expressed concern over this problem and tried to avoid confusion. Thirdly, no such confusions regarding which derivative action to use will actually arises because members of private and non listed companies will of course choose the SDA since it is much more convenient and those shareholders of listed companies and offshore companies will of course choose the CDA since they cannot use the SDA therefore we do not see much possibility of confusions arising because of the co-existence. Therefore we should preserve the CDA. 2. 4. 2 The MDA Currently we can take multiple derivative actions (MDA) only under CDA as affirmed by the decision made by Court of Final Appeal in Waddington Ltd v Thomas Chan Chun Hoo. Waddington case introduced a very important way for minority shareholders of the associate to sue the directors of the specific corporation however that case is based on CDA. Although in response to the comments made by the Court of Final Appeal in that case, the extension of SDA to cover MDA has been considered by Standing Committee on Company Law Reform (SCCLR) recently, it has not been really passed yet now. Once we abolish CDA which is the legal basis of MDA Waddington will not longer apply and MDA may come to an end. Therefore that will become a source of confusions as people may wonder whether MDA can be used without the CDA. Therefore the rights of concerned person have to be safeguarded before the legislation of MDA. It is therefore safer to preserve CDA at this stage to protect the rights under the MDA and avoid confusions. 2. 5 Other Drawbacks of the CDA Can be Ignored at the Current Stage Now comes the inherent weaknesses and drawbacks with CDA which can actually be ignored. First, the Foss rule is complicated and instable. Someone even call the Foss rule the deepest mystery of company law. 14] The rule is obscure and outdated. Much of the cases were decided years ago and it’s hard to reconcile all those decided cases. As Parlie Choo mentioned in his work what exactly amounted to a fraud on the minority has been conflicting and difficult. [15] The importance and extent of ratification was unclear And also, the court seems unwilling to get involved with the internal management of companies. [16] Some exemptions are actually hard to be satisfied constitute the second weakness of CDA. Exemptions must be proved under CDA, failing to do so the plaintiff failed the trial. Fraud on minority might be the most representative one. The court will collect shareholders’ opinions as to decide whether fraud exists. In cases where the wrongdoer is also the controlling shareholder, this is extremely difficult to prove. So injustice exists when the wrongdoer got the majority control. The problem is most severe with listed public companies. Thus, CDA easily fails to protect the small shareholders effectively which means it fails the initial purpose of derivative action. Last but not least, in most cases, the costs of the proceedings must be borne by the individual or minority shareholder who commences the action. As we recall from previous, the degree of evidence differs under each scenario. And we make the assumption that the more evidence to be collected the higher cost. Under SDA, the hurdle is actually low and the company may take over the case as well as the cost. However under CDA, the exceptions are very strict requirements and the shareholder is responsible for the case from the beginning to the end. As Dr Y. C. Choong said, under CDA cost can be crippling as they have to show that he has the locus standi (the right) to sue in a preliminary hearing. [17] However as we say above those people can choose the SDA for easy legal proceedings but those people who cannot use the SDA have to use the CDA. And we should not deprive their rights just because that the CDA is relatively complex. Therefore these issues can be regarded as minor issues and should be ignored at the current stage since the Companies Ordinance has not been perfect. 3. Preserve the Common Law Derivative Action in Hong Kong On the balance of the above five issues the authors think that we should preserve the CDA in Hong Kong at the current stage. 4. Further Recommendations 4. 1 Slight amend the Companies Ordinance 4. 1. 1 Option1[18] Abolish the CDA for specified corporations since the shareholders of those companies can use the SDA. Keep the CDA for offshore companies. Furthermore the MDA should be recognized by the Companies Ordinance and base it on the SDA. 4. 1. 1 Option2[19] Extend the SDA to overseas companies and abolish the CDA. any person who, to the satisfaction of the court, has an interest in the relief claimed in the proceedings, whether legal or equitable. [20] Furthermore the MDA should be recognized by the Companies Ordinance and base it on the SDA. 4. 2 Regulate the offshore compani es Hong Kong may amend the Listing Rules to require the offshore companies to sign to accept the regulation of Hong Kong Statue therefore the minority shareholders may be able to sue under the SDA. However even that is the situation the directors may not have the assets in Hong Kong and remedy is still hard to get in practice. Therefore we have the third suggestion which is a similar legal system in the Region 4. 3 Similar law system in the Region Once the law in different jurisdictions becomes much more similar offshore companies are of course regulated and minority shareholders’ rights are well protected because similar legal system in the Region can enhance the cooperation between Hong Kong and neighbor jurisdictions in terms of executing the statue and order granted by the court. Or maybe even better the similar legal system will make Hong Kong court judgments have binding effect on the offshore companies and then in practice the remedy can be got much easily than the current CDA model. 5. Conclusions In this paper we response to the Question 7 of the consultation paper and our answer is we should preserve the CDA currently. We consider five aspects and rationally prove that the CDA should be preserved in respect of each aspect. Although the authors prefer to preserve the CDA, further suggestions are also provided for future improvement of some current practical weaknesses in terms of derivative action in Hong Kong. References The statutory derivative action: now showing near you, Paul von Nessen S. H. Goo Chee Keong Low, 2008, Journal of Business Law Griggs, L. (2002). A Statutory Derivative Action: Lessons That May Be Learnt From its Past. Retrieved April 2010, from Australasian Legal Information Institute: http://www. austlii. edu. au/au/journals/UWSLRev/2002/4. html Li, X. (2006). nbsp;