Singapore Law Law Term Paper Research Coursework Paper (Term Paper Sample)

Derivative Action in Singapore
Student Name
Institutional Affiliation
Introduction
According to Puchniak and Han (2016), 'there are two fundamental ideologies in the laws of Singapore that govern companies in particular. 1) A company is treated as a distinct entity. 2) The board's directors are obliged to faithfully discharge their duties to the company and not the individual shareholders. This, therefore, means that if the directors commit a wrong it is only the company as a distinct entity that can take legal action against them.' However, because the company is not a real individual, it cannot resolve to sue. The only way a company can take legal action is by a real individual suing on its behalf. In the event where board's directors are in the wrong the question that needs to be answered therefore is, 'who should decide whether a company should sue?'
Generally, the laws of Singapore confer a company's board with the responsibility of making all managerial Ferran (2016). Because the decision-making process can only be made by the management, the board usually is the one in a position to resolve whether the board's directors will be sued for breaching their duties. However, the situation gets complex when the directors who should decide whether the company should take legal action are the same ones who are in the wrong.