Re Smith & Fawcett Limited [1942]

Companies’
articles provided directors might in their absolute discretion refuse to
register any transfer of shares.
Were
only two directors and shareholders, F and S, who held 4001 shares each.
When
F died, S and a co-opted director refused to register transfer of his shares
into names of his executors.
S
offered instead to register 2001 shares and buy remainder himself.
Court
of Appeal refused to intervene in exercise of this discretion without evidence of
male fides.
Lord
Greene MR –
Where
articles confer on directors discretion to refuse to register transfer of
shares, they must exercise their power bona fide in interests of company, but
subject to this qualification, they may be given an absolute discretion.
Must
be remembered this is private company, and it is to be expected that in
articles of such a company control of directors over membership may be v strict
indeed.

May be good business reasons for this.