Meaning
Statutory remedy provides a pathway for an aggrieved person or any member of a company to correct errors or omissions in the register of members. Under the UK Companies Act 2006, a section 112 rectification is sought when a name is entered without sufficient cause or when a person has ceased to be a member but remains on the list. The court possesses the power to order the payment of damages alongside the physical update of the records.
This remedy applies only to the internal member list and not to the public filings at the registrar of companies.
Corrective Scope
Disputes over the ownership of shares often require the court to determine the underlying validity of a transfer. If a share transfer was executed through fraud or a mistake of fact, a section 112 rectification allows the rightful owner to regain their status on the register. The process is not intended for complex commercial litigation that should be handled through a full trial.
It functions as a summary procedure to ensure that the primary evidence of membership is accurate and up to date.
Judicial Authority
Judges have wide discretion to decide whether the register should be amended based on the evidence presented by the parties. The court may choose to resolve a question of title to any shares as part of the section 112 rectification process. This authority allows the court to look past the surface of the document and examine the intent of the transacting parties.
Because the register is the definitive proof of who holds the rights in a company, the court acts to protect the integrity of corporate governance. This power is particularly important during hostile takeovers or shareholder disputes where the control of the board is at stake.
Evidentiary Requirement
Proof of a valid transfer or a clear error is necessary to trigger the intervention of the court. The applicant must show that the company has failed to act on a legitimate request to update the records or that the existing entries are demonstrably false. A section 112 rectification cannot be used to bypass the standard rules of share issuance or the payment of stamp duty.
The procedure concludes with an order that the company must comply with within a set period.
