Sidebottom v Kershaw, Leese & Co [1920] 1 Ch 154

Facts: An alteration allowed directors to purchase shares of members engaged in competition at a fair price. Minority shareholders objected, arguing this provision was invalid.

Issue: Was the alteration valid under the principle established in Allen v Gold Reefs, requiring changes to be for the benefit of the company?

Held: The alteration was upheld. The court found that removing competitors served the company’s interests, validating the provision.

Key Judicial Statement: The court affirmed that the alteration was made for the company's benefit, consistent with the Allen principle.

💡 Leveluplaw: Under the Allen principle, alterations to company articles must be made in good faith and for the company's benefit. Targeting competitors was deemed valid as it served the company’s interests.