hareholders from bringing lawsuits at the beginning. In New Zealand, it requires that the benefits to company must outweigh the costs of taking derivative action. In India, under the clauses of oppression and mismanagement, derivative action can be brought out.
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6. Conclusion
Historically, in Hong Kong derivative action refers to common law derivative action system, that is, under certain circumstances it allows minority shareholders to initiate proceedings on behalf of the company. These certain circumstances mainly include the company’s misconducts constitute “a fraud to small shareholders”, and wrongdoers of misconducts are in a controlling status of the company. But in practice, there are a variety of practical difficulties for small shareholders to initiate derivative action. In view of this, in 2004 the legislative council of the Hong Kong Special Administrative Region revised Hong Kong Companies Ordinance, supplementing Article 168BC, stipulating members can file or get involved in the legal proceedings, which have retained the common law derivative action system and in the meantime established the statutory derivative action system. In Hong Kong, before 2010 Cap 32 only regulates simple derivative action, which did not set rules of multiple derivative action. Even so, in Waddington Ltd v. Chan Chun Hoo Thomas and others case in 2008, the court of final appeal of Hong Kong have still established the principle of multiple derivative action in the case law according to the principles of the common law. In 2014, Cap 622 have come into effective, which integrates all the relevant contents in different parts of Cap 32, systematically regulates derivative action in the Part 14 of Cap 622. Though Cap 622 did not change the tradition of common law which inclined to the company efficiency, regarding to strengthen the protection of shareholder’s rights, Cap 622 also has its innovations.
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