Dafen Tinplate Company Ltd v Llanelly Steel Company (1907) Ltd [1920] 2 Ch 124

Facts: The case involved an amendment giving the board the power to require a member to transfer shares to a nominated person at a fair value.

Issue: Was the alteration valid if it was not genuinely for the benefit of the company?

Held: The amendment was invalid. The court found that the new article did not genuinely benefit the company.

Key Judicial Statement: Peterson J stated, “The question was whether the alteration was genuinely for the benefit of the company, not whether the shareholders acted in good faith.”

💡 Leveluplaw: For an alteration to be valid, it must genuinely benefit the company, not just reflect shareholders' beliefs about its benefits.