Minutes Of The Extraordinary Shareholders Meeting Held On: Fill & Download for Free

Wonderful question!Throughout my entire career as a serial entrepreneur and writer, I have been fascinated with a question that correlates directly with becoming part of the 1%:Is there some unique way of thinking that gives self-made billionaire entrepreneurs an edge?I’ve read more billionaire entrepreneur biographies than I can count, researched what they have in common, and met and interviewed several.Without a doubt, luck plays a central role. But luck alone doesn’t explain the repeated success of entrepreneurs who create billion dollar company after billion dollar company or who have enduring multibillion dollar companies: entrepreneurs like Warren Buffett, Jeff Bezos, Steve Jobs, and Elon Musk.By researching these entrepreneurs, I’ve found unique ways of thinking that aren’t commonly known among most entrepreneurs (even successful ones).The process of uncovering these principles has fundamentally changed how I think about business. Some have served as a reminder that it’s consistently doing simple things that matter most.Photo Credit: Steve Jennings/Getty Images For TechCrunch (Elizabeth Holmes), Michelle Andonian (Elon Musk), Joi Ito (Reid Hoffman), AP Photo-Nati Harnik (Charlie Munger), Steve Jurvetson (Jeff Bezos), World Economic Forum/Moritz Hager (Ray Dalio), Marcin Mycielski (Larry Page), Matthew Yohe (Steve Jobs), Stuart Isett/Fortune Most Powerful Women (Warren Buffett)For each entrepreneur I studied, I’ve uncovered a:Billionaire entrepreneur strategy. The overarching principle that has served as a foundation for the billionaire’s success. I focused on one specific, non-obvious strategy.Billionaire entrepreneur hack. How successful entrepreneurs are applying the strategies to grow their business.1. Charlie Munger (billionaire investor): Analyze what can go wrong instead of what can go right.Photo Credit: AP Photo-Nati HarnikBillionaire Entrepreneur Strategy:Until I read billionaire Charlie Munger’s Poor Charlie’s Almanack, I thought the key to success was creating a vision, setting goals, and working hard toward them every day.If I failed, I thought it was because I did one of these steps wrong.Charlie Munger, Berkshire Hathaway vice chairman and long-time Warren Buffett business partner, shows another equally important path to success; thinking through what can go wrong.Things constantly go wrong no matter how smart and hardworking you are.Realizing this, Munger continuously and methodically considers every way a plan could go wrong and plots out how to avoid each obstacle. He says:“Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead — through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die so I don’t go there.”Munger’s approach helps him avoid roadblocks and be more prepared when he inevitably runs into one. Furthermore, combining goal setting and obstacle avoidance is backed up by a growing body of over 100+ academic studies on the topic. When people only ‘fantasize’ about the future, they actually end up taking less action than they would if they also thought about what could go wrong and made plans to avoid it.Bottom line: Being both pessimistic and optimistic is better than just being optimistic. One of the best ways to win is not to lose.Billionaire Entrepreneur Hack:To apply this principle, test your plan with this three-step pre-mortem process developed by Meathead Movers CEO and cofounder, Aaron Steed:List the ways the project could failAssign a probability to each possibilityPrioritize actions that can be taken to avoid failureSteed created the process after noticing that certain projects at his 350-person company were getting poor results.Rather than adding new procedures to help those projects succeed, he developed the pre-mortem process to remove the barriers that were causing them to fail.One of the obstacles that Munger proactively avoids is psychological biases. As an additional resource, we compiled a 27 page report that summarizes the 22 psychological biases that Munger has identified throughout his 70-year career.2. Warren Buffett (billionaire investor): Use checklists to avoid stupid mistakes.Photo Credit: Stuart Isett/Fortune Most Powerful WomenBillionaire Entrepreneur Strategy:Generally speaking, there are two types of mistakes: those that are stupid and those that are ignorant.Ignorant mistakes happen when you don’t know better. Stupid mistakes happen when you do know better.Stupid mistakes are the hardest to stomach because they’re the easiest to solve. Yet people, especially smart people, make them over and over.Warren Buffett and his 40-year business partner, Charlie Munger, don’t attribute their success to raw intelligence or brilliant ideas. Instead, they attribute a large part of it to consistently avoiding stupid mistakes by religiously following basic tenets and ideas they know will work.Talking about his and Buffett’s strategy in his book, Munger states:“We try more to profit from always remembering the obvious than from grasping the esoteric.”To counteract the often negative influence emotions can have in investment decisions, Buffett and Munger use several checklists, including ones for investing, problem solving, and psychological biases.They claim that using these checklists have been crucial to their miraculous 21.6 percent return on investment for four decades, which is double the market average.More recently, checklists have been receiving well-deserved attention as a result of theChecklist Manifesto, written by Harvard Medical School professor of surgery, Atul Gawande.In a fascinating study by the World Health Organization, 8 hospitals who adopted a 19-point checklist saw deaths from surgery nearly cut in half!Billionaire Entrepreneur Hack:Blake Goodwine has used a decision-making checklist to build his Lionize Media Group into a network of niche media sites with tens of millions of monthly visitors.His problem-solving checklist, shown below, lays out the path to a successful business strategy, and counteracts any internal biases that impede him from reaching his desired destination:Brainstorm. Dream up as many possible solutions as you can. This helps you avoid availability bias, which often results in us choosing the first solution that comes to mind rather than the best solution.Test. Test as many potential solutions as you can afford to. This avoids the confirmation bias of rationalizing the one solution you chose.Evaluate. Have a minimum success criteria for each experiment. This allows you to avoid doubling down on bad ideas that aren’t working in an effort to recoup sunk costs.Learn. Dive deeply into the data and learn from EVERY experiment, not just the one that worked best. Avoid taking mistakes personally and feeling shame over something that did not work.Goodwine says:“Even if this checklist helps you make big decisions just slightly better, it will change the entire trajectory of your life and business. It has for me.”As an additional resource, we compiled some of the best expert advice on how to create actionable checklists into a step-by-step guide.3. Ray Dalio (billionaire investor): Learn how to think independently so you can be smarter than everyone else.Photo Credit: World Economic Forum/Moritz HagerBillionaire Entrepreneur Strategy:“You can’t make money agreeing with the consensus view,” asserts Ray Dalio, founder of Bridgewater Associates, the largest hedge fund in the world ($169+ billion under management).Doing what everyone else does is going to bring you average results. That’s the definition of average.To Dalio, the key to having enduring, extraordinary performance is to do what others won’t or can’t AND to be right.This is easier said than done. For example, 86% of professional investors do not beat the market. The numbers are sobering for entrepreneurship too: 30.9–37.6% of new businesses fail in the first three years.In a recent op-ed, Dalio explains why it’s so hard:“Whenever you’re betting against the consensus there’s a significant probability you’re going to be wrong, so you have to be humble.”The good news is that with enough practice, you can put the odds in your favor.Billionaire Entrepreneur Hack:Thinking independently is more than one simple hack. Broadly speaking, it requires:Courage to stand up against the herd when you’re right and everyone else is wrongAccess to or understanding of information that other people don’t haveUnique ways of analyzing that informationHere are ways to hone each of those abilities:Ability #1: Stand Up Against The HerdWe are wired to want to fit in socially. So, standing up against the herd is extremely hard.Fortunately, courage is a skill that can be practiced.Emerson Spartz, founder and CEO of Spartz Inc., a digital media company that owns a network of sites like Dose and OMG Facts (45+M monthly visitors), practices daily what he calls comfort zone challenges. Spartz says:“These are little things I do that cause me to feel uncomfortable and socially awkward, but have no real negative impact.”These challenges train him to be comfortable with being uncomfortable, so he has courage when he really needs it.His favorite challenge is the coffee cup challenge, which is simply asking for a 10 percent discount when you buy coffee.Ability #2: Develop An Information AdvantageOne of the easiest ways to beat the herd is to have an information advantage. Here are four ways to get that advantage:Build deep relationships with people who have accomplished the goals you want to accomplish. By building relationships based on mutual trust and respect, where others want you to succeed, people share information they never would publicly. For more on this strategy, read Reid Hoffman’s strategy (see #7).Learn from other fields and bring the insights into your own. Most people focus on learning about their own field, even though other fields have proven insights that are applicable. Being an expert-generalist (a term coined by Orit Gadiesh, the chairwoman of multibillion dollar consulting company,Bain & Company) and going wide into adjacent fields will quickly give you a unique perspective.Build a lab, not an experiment. Entrepreneurs who can conduct more experiments will discover more new data and therefore have a big advantage. These entrepreneurs look at their business as a lab where they constantly run experiments. Many entrepreneurs fail here because they look at their business as one big experiment to test just one idea.Be good at pulling out the wisdom of others. Many successful people are not able to articulate how they do what they do. They just do it. Asking the right questions can help bring to the surface this tacit knowledge. One way that famous technology investor, Peter Thiel, uncovers this knowledge is by asking the founders he backs what they strongly believe that no one else does.Ability #3: Develop An Analytical AdvantageThis is where many of the billionaire strategies mentioned in this article can be applied:Charlie Munger (see #1)Elon Musk (see #8)As an additional resource, we summarized Ray Dalio’s seminal ebook, Principles, and interviews he has done over the years into a step-by-step guide on how to develop your own independent opinions.4. Jeff Bezos (Amazon founder): Invest in what will NOT change instead of only what will changePhoto Credit: Steve JurvetsonBillionaire Entrepreneur Strategy:Judging by the media coverage of entrepreneurs, it’s easy to think that the #1 key to success is hopping on the biggest trends.Jeff Bezos shows that big trends are only part of the story. It’s also about doing the exact opposite and focusing on what does not change.Since its founding in 1994, Amazon has focused, like a laser, on the simple idea that people will always want to buy products as cheaply, easily and as quickly as possible. Therefore, Amazon can safely make huge technology investments in these areas and know they will pay off in the future.Bezos explained why this approach makes sense at the 2012 Amazon Web Services conference:“It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ or ‘I love Amazon; I just wish you’d deliver a little more slowly.’”The strategy seems to be working. Amazon just became the most valuable retailer in the world this year, and its growth is speeding up, while the growth of its main competitor, Walmart, is slowing down.Bottom line: Become the best in one core area by continually investing in it over time, rather than jumping from trend to trend and starting over each time.Billionaire Entrepreneur Hack:To apply this principle to your business, identify a core customer need that will likely stay the same (even as technology and culture evolve) to which your company is uniquely positioned to cater.Then build your company around it.This is what Ohio-based entrepreneur Jason Duff did.Realizing that nostalgia doesn’t get the attention it deserves, Duff built his whole real estate business around it. Nostalgia is the universal inclination to remember the past sentimentally in order to derive meaning from our lives.Duff applied this insight in his company by focusing on restoring historic downtown buildings rather than tearing them down and building modern structures.He used the following formula to create hundreds of jobs in his community and build several multimillion dollar businesses.Purchase overlooked historic properties at a large discountInvest heavily in repurposing and restoring themTell the story of what they meant (and could mean again) to the community through social media.In doing so, he has increased the value of the property, by tapping into the warm feelings held by the townspeople who remember coming to the building in their youth. His Facebook posts providing details on renovation projects regularly attract hundreds of likes.5. Elizabeth Holmes (31-year-old billionaire): Be laser focused on a single problem with no backup plan for your career.Photo Credit: Steve Jennings/Getty Images For TechCrunchBillionaire Entrepreneur Strategy:Elizabeth Holmes, the 31 year old founder of Theranos (valued at $9 billion) doesn’t believe in backup plans. Speaking to a group of students at the Stanford Graduate School of Business, Holmes shared her philosophy:“I think that the minute that you have a backup plan, you’ve admitted that you’re not going to succeed.”Conventional thinking says you should diversify when it comes to your career, business, and strategies within your business. The rationale is that if one option fails, you’ll still have something to fall back on.The problem with this approach is that it takes precious time and resources away from your best option. As a result, you decrease the odds that either one will work.Holmes’s approach is to spend extra time determining what to focus on and then put all of her energy into that one thing. The same philosophy is used by Warren Buffett who only makes 2–3 investments per year.Another benefit of going all in on one career path is that you are building up your skills, network, and reputation in that field, so even if things don’t go as you had planned, you can still use your ‘career capital’ to pursue your next big idea.Finally, Katy Milkman, a professor at Wharton, has performed research that shows that backup plans come with another unexpected downside. She explains the downside in an episode of the Hidden Brain podcast:“Because you know that all your eggs aren’t in this one basket, you may feel more confident and comfortable relaxing and letting up and not pushing as hard toward your primary goal since you know things will be OK, you can always go with your back up plan.”Billionaire Entrepreneur Hack:By not having a backup plan, you can put all your energy into your primary plan.But, in order for this to work, you need to have put in the extra effort to make sure you’ve prioritized correctly.The “one thing” philosophy is a powerful approach that ensures you stay on track.The heart of this approach is taking extra time to prioritize, so you always have clear view of the one most important thing you can do for the day, for the week, for the month, and for the year to push your vision forward.This approach:Forces you to get a deeper understanding of what’s really importantIncreases the odds of completing that one thingRyan Simonetti, co-founder of Convene, which has 150+ employees, applies the “one thing” philosophy by waking up every morning and asking himself,“What is the one thing I need to do today to help my company accomplish its singular vision such that by doing it everything else would be easier or unnecessary?”In an Entrepreneur.com article, Simonetti shares,“When you compound this process over days, months and years, the impact is truly astounding. It is the 80/20 rule on steroids.”Professor Edward D. Hess has spent much of his career studying the outliers (both private and public companies) that achieved above average shareholder returns. What he shares in his book, Smart Growth, is that focus on a singular vision is one of the key themes of successful companies.6. Steve Jobs (Apple co-founder): Use storytelling to make your vision more compelling; not mission-speak.Photo Credit: Matthew YoheBillionaire Entrepreneur Strategy:Having a powerful vision is essential for all entrepreneurs, but if you are going to excel, your stakeholders need to buy into your vision.That’s where most people fail.For many, the vision ends up becoming a few lines of mission-speak on their corporate website.Yet, there are other leaders like Steve Jobs and Elon Musk who seem to have the superpower to distort reality.After listening to them, it feels like their vision of the world is inevitable and http://critical.It is easy to attribute this ability to charisma, but there is a case to be made that Jobs was just really good at storytelling, which is a learnable skill.According to academic studies on storytelling, great stories transport others into a whole other world and, in doing so, alter their beliefs, cause a loss of access to real-world facts, evoke emotions, and significantly reduce their ability to detect inaccuracies.Throughout history, visionary storytellers have changed the course of societies and industries:Billionaire Entrepreneur Hacks:1. Turn Your Vision Into A Detailed Story And Picture1–800-GOT-JUNK? founder and CEO Brian Scudamore captures his company’s vision through a document called the Painted Picture.In vivid detail, the document explains what Scudamore expects the company to be like in 3 to 5 years. This description includes both quantitative details (like the number of people the company will employ and how many locations it will have) and qualitative ones (like how employees will describe the culture to their families).The Painted Picture was paramount in 1–800-GOT-JUNK? growing its revenues to more than $100 million, Scudamore says. He recommends the following steps "retreat, visualize, and ask" to create your own:Retreat: First, grab a notebook and find a quiet space where you don’t have any distractions from your daily life.Visualize: Transplant yourself five years into the future. See yourself looking around at your life and your business. Imagine that you’re really in that place where the future HAS already happened. For example, if you have a five-year old child, imagine your child is now ten. Then, imagine yourself five years older.Ask: Once you’ve transported yourself to that place, ask yourself some questions that will help you “crystal ball” the future. Here are some key questions to ask yourself:- What is your top-line revenue?- How many people are on your team?- How would your people describe the culture of your company when talking to a family member?- What is the press saying about your business? Be as specific as possible: what would your local paper say about your company? What would your favorite magazine say?- What do your people love about your vision and where the company is headed?- How would a customer describe their experience with you? What would they say to their best friend?- What accomplishment are you most proud of? What accomplishment are your people most proud of?- What do you do better than anyone else on the planet?- Describe your office environment in detail.- Describe your service area. Who are your customers and how do they feel?As an additional resource, read Brian Scudamore’s article on the science-backed reasons that creating a vision is so powerful.2. Share Your Vision Often And EverywhereCameron Herold, author of Double Double, CEO coach and globally renowned speaker has helped tens of thousands of high growth entrepreneurs and leaders from 6 continents create a Vivid Vision for their organizations.One of the biggest mistakes that Herold sees leaders make is keeping their vision to themselves rather than sharing it with others.He recommends sharing your Vivid Vision as widely and as often as you can. This means sharing it with your team, family and friends, investors, media, customers, potential employees, and partners. He explains why:“When you’re a startup just getting traction, you can’t offer the salary and benefits that a world-class employee would normally get at a large company. You haven’t accomplished a lot that you can talk to the media about. So, what you’re always selling is the sizzle; not the steak. The sizzle is your vision!”A few ways and reasons that Herold recommends sharing your vision with different stakeholders include:Media Exposure. Herold recommends turning every conversation with the media into a conversation about the vision:“What makes a company like Uber get covered is not the fact that it’s a taxi service; it’s the story that Uber is completely changing the transportation industry. If companies like Uber only talked about what they did now, they’d be boring and they’d only get a fraction of the media coverage.”Employee Filtering. Herold says that the Vivid Vision should act like a magnet; it should attract those who are committed and repel those who aren’t. He shares one example of what one of his CEO clients told his employees after sharing the vivid vision with them for the first time, “15% of you hated what you heard. That’s alright. Now’s an ok time for you to leave. 5% of you loved it. Let’s build it. This is what we’re working toward.”Customer Relationships. Herold advises his clients to send out the vivid vision quarterly to their customers, “90% clients may not care, but even if just a few do, you’ll be able to take your relationship to a whole new level.”Employee Alignment. Herold says that sharing the vision internally leads to more clarity, less in-fighting, and less bureaucracy, because there isn’t confusion about what everyone is working toward. It’s crystal clear and not questionable. Herold recommends that every quarter, employees reread the vivid vision as a team and do a few things: (1) Highlight each sentence with green, yellow, and red depending on how it’s doing so everyone can visually see how the vision is coming alive. (2) Share how they individually can make each sentence of the vivid vision come true. (3) Circle sentences that really excite them and read those sentences out loud.Executive / Board Alignment. In a Forbes interview, Herold recommends having one executive read all or part of the vivid vision at the beginning of your meetings meetings with executive and board members.As an additional resource, go here to download Cameron’s free book chapter on how to create a Vivid Vision.7. Reid Hoffman (LinkedIn founder): Build deep, long-term relationships that give you insider knowledge.Photo Credit: Joi ItoBillionaire Entrepreneur Strategy:If you reverse engineer the relationships of many successful entrepreneurs, as I have, you will realize that many people work with the same people over and over in their careers.In the technology world, this phenomenon has been cataloged extensively (see the mafias of Oracle, Netscape, Fairchild, PayPal, andMyspace). Each of these companies have spawned new multi-billion dollar enterprises as a result of former employees starting new companies together, advising each other, investing in each other, and much more.These long-term, collaborative networks are often referred to as mafias. Reid Hoffman, founder of LinkedIn and part of the PayPal mafia, has put these types of relationships at the centre of his career and makes a case that others should too. In the information age, one of the best ways to get information is not from just being better at searching Google, it’s from learning how to build a network and get the information you need through that network, Hoffman says.In a fascinating interview on This Week In Startups, Hoffman goes so far as to say that the biggest mistake in his career was deciding that in order to be a product manager he needed to learn product management skills. In retrospect, he would have focused on placing himself in the right network by working at one of the fastest growing, futuristic companies at that time: Netscape.Hoffman refers to the information that only exists in people’s heads as the ‘dark net.’ This includes information that is not searchable online, in any book, or in any classroom and never will be.Getting access to this ‘dark net’ information from people who have accomplished what you want to accomplish is extremely valuable and will help you think independently. The ‘dark net’ includes people’s lessons learned and hacks, topics that are too sensitive to talk about because they make someone look bad, and tacit knowledge (knowledge that people have but aren’t able to articulate).Hoffman explains the power of the ‘dark net’:“Ten extremely informed individuals who are happy to share what they know with you when you engage them can tell you a lot more than a thousand people you only know in the most superficial way.”Billionaire Entrepreneur Hack:Deep long-term relationships don’t happen by chance. Just as divorce rates are high, so too are partnerships that go sour.Two keys on building long-term relationships that I’ve learned from researching and writing on the art and science of building deep and authentic relationships for Forbes include:Key #1: Be extremely picky about whom you spend a lot of time around.Our time is limited. Every minute you spend with one person is a minute you’re NOT spending with someone else. Below are characteristics other relationship builders and I use for filtering our professional network:1. Professional network. Qualities that I look for:They value relationships over pure achievement and are willing and able to invest in the relationshipThey are giversThey are open to being vulnerable and to sharing their true experiencesI genuinely enjoy spending time with themThey are constantly growing and learningThey share similar values2. Close business relationships. Rohit Anabheri, founder of the firm Circa Ventures($10M+ revenue), has built multiple multimillion dollar companies before he turned 30. He has built each business through business partnerships by using the following rules:Have a mutual, enduring commitment to the relationship so you can get through tough timesComplement each other in multiple ways; strengths and weaknesses, visionary and execution, and styleHave clear, mutually-agreed-upon rolesKey #2: Invest the time.No matter how successful you are, building deep relationships still takes a lot of time. So, it’s critical to turn relationship building into a habit.8. Elon Musk (SpaceX and Tesla co-founder): Use decision trees to make better decisions.Photo Credit: Michelle AndonianBillionaire Entrepreneur Strategy:Many thought that Elon Musk was crazy when he plowed all of his PayPal earnings into SpaceX and Tesla. However, there was a proven logic behind Musk’s decisions. Musk, like Warren Buffett, uses decision trees to make big decisions.Decision trees are particularly useful for avoiding stupid risks and big bets that aren’t likely to succeed.Making unlikely big bets:In an interview with tech entrepreneur Kevin Rose, Musk admits that he thought the most likely outcome for both SpaceX and Tesla was failure. However, they were both so important to the future of humanity and had so much potential that he felt the risk was worth it.Probabilistically, it makes sense. Here’s why.Financially, if Musk thought that SpaceX could be a $100 billion company and that the chance of success was 30 percent, the expected return statistically using a decision tree is $30 billion. Not bad!Musk could have easily focused on a company with a $1 billion potential and a 80 percent chance of success. But, in this case, the expected return would only be $800 million.Avoiding “Russian roulette” risks:If there is even a tiny chance that doing something could destroy you, it’s a very bad idea.In a talk, Warren Buffett compares these types of situations to Russian roulette:“If you hand me a gun with a million chambers in it, and there’s a bullet in one chamber, and you said, ‘Put it up to your temple. How much do you want to be paid to pull it once?’ I’m not going to pull it. You can name any sum you want, but it doesn’t do anything for me.”Smart people fall for this mistake all the time. In the same talk, Buffett shares the story of the collapse of the multibillion-dollar hedge fund Long-Term Capital.The leadership team included the smartest people in the industry along with Nobel laureates. Yet they played Russian roulette. For every dollar of their money they invested, they borrowed $25. This made them extremely susceptible to a downturn in the market, even a small one. This happened in 1998 and the firm went under in just a few months.Buffett’s point was that all of the company leaders were already extremely wealthy and had spent decades building reputations. So, the incremental benefit of growing richer was small compared with the risk of losing everything, which they ultimately did.Billionaire Entrepreneur Hack:Utilizing a decision tree does not require a PhD. All that’s needed is a basic understanding of probability. Here’s a step-by-step process you can follow to use the principles in your decision making:Understand the different outcomes that could happen (both positive and negative)Calculate the expected return or loss of each outcome:Attach a probability to each outcomeUnderstanding the magnitude of the return or lossMultiple the probability by the magnitude (probability of winning * value of win) — (probability of losing * cost of the loss)Add up and subtract all of the expected returns and lossesTo get started you don’t need to know the exact probabilities. Just following the process will give you unique insights you wouldn’t have had otherwise (i.e., the power of unlikely big bets and the risk of Russian roulette decisions).For a step-by-step guide on how to create decision trees, visit this page. It is an online companion to an economics textbook.—Special thanks to Rachel Zohn, Sheena Lindahl, Emily Shapiro, Austin Epperson, and Ian Chew who volunteered their time to edit this article and do research.Also thank you to Jessica Newfield, Antonia Donato, Amber Tucker, andEduardo Litonjua for reviewing the article and providing insightful feedback.Disclosure: Some of the contributors featured in this article are members of Seminal, a selective council that distills research-backed, actionable insights from world-class entrepreneurs and leaders.

We may also point out that the House of Lords did not approve of the undue emphasis put on the contractual rights arising from the articles over the equitable principles, derived from partnership law in In Re Cuthbert Cooper & Sons Limited.Wherever the lack of confidence is rested on a lack of probity in the conduct of the Company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the Company be wound up."There are six recipes in this section and we are concerned with the sixth, namely, that a Company may be wound up by the court if the court is of the opinion that it is just and equitable that the Company should be wound up.summary ...P.K Goswami, J.— This appeal by certificate is against the common judgment of the Calcutta High Court in respect of respondents' application for winding up and appellant's stay application relating to the Hind Overseas Private Limited, a private limited Company (briefly the Company).2. The question that is raised in this appeal relates to the scope of Section 433(f) of the Companies Act, 1956 (briefly the Act) and in particular whether the principles applicable in the case of dissolution of partnership could be invoked in the case of the Company.3. The allegations in the winding-up petition before the High Court are as follows.4. The Company was incorporated under the Act in August 1956. The nominal capital of the Company is Rs 5,00,000 divided into 2500 equity shares of Rs 100 each and 2500 unclassified shares of Rs100 each, the entire nominal capital has been issued and fully paid up.5. The petitioners (respondents herein), Raghunath Prasad Jhunjhun-walla and his son, Phoolchand Jhunjhunwalla (hereinafter to be described as “R.P.J” and “P.C.J” respectively), and the members of their family held 1875 shares in the Company and the remaining 3125 shares are held by one V.D Jhunjhunwalla and the members of his family.6. In or about the month of May 1956, R.P.J and V.D Jhunjhunwalla (briefly V.D.J) who was then carrying on business under the name and style of “Chimanram Motilal” with his cousin, one Mahabir Prasad Jhunihunwalla (for brevity M.P.J) agreed to start a new business of iron and steel in co-partnership and for that purpose an account was opened in the name of “Raghunath Prasad Jhunjhunwalla Ke Sir Khata” in the books of “Chimanram Motilal”. It was further agreed between the parties that R.P.J would have six annas share and V.D.J along with M.P.J ten annas share in the said proposed partnership business.7. Before the said proposed business could be started, V.D.J, however, changed his mind and sometime in the month of June 1956, he suggested to R.P.J that a limited Company be formed, inter alia, to carry on the business in iron and steel and the shares in the Company would be held by R.P.J, V.D.J and M.P.J and the members of their respective families in the same proportion as mentioned above. V.D.J further agreed to provide for and arrange along with M.P.J the entire finance that may be necessary for the purpose of the business of the Company and R.P.J and his group would generally look after the day to day business of the Company under the general control and supervision of V.D.J It is stated in the petition that R.P.J in view of the relationship between the parties and having trust and confidence in V.D.J agreed to the said suggestions and accordingly the Company was formed on or about August 9, 1956, under the provisions of the Act. One Anil Chandra Dutta, an employee and nominee of V.D.J along with R.P.J became the subscriber to the memorandum of association of the Company and also became its first directors. After its incorporation, the Company carried on for some time the business of controlled stockists of iron and steel and since the end of the year 1958 the Company carried on the business of the manufacture and supply of railway sleepers in execution of government contracts.8. On or about August 23, 1956, V.D.J and M.P.J were co-opted as directors of the Company. On or about November 23, 1957, Anil Chandra Dutta resigned from the Board of Directors and P.C.J was co-opted as a Director in his place. R.P.J was appointed as Director-in-charge of the Company on November 23, 1957 at a monthly remuneration of Rs 1,000. This remuneration was subsequently increased to Rs 1,250 per month with effect from October 1, 1961 and he was also granted further allowance of Rs 25000 per month on account of maintenance of guest house. His monthly remuneration was again increased to Rs 2,000.00 with effect from September 1964. The monthly remuneration of P.C.J was initially fixed at Rs 750.00 per month with effect from October 1, 1961 and was subsequently increased to Rs 1,500.00 from September 1, 1964.9. Following a family partition between V.D.J and M.P.J about the year 1958, the shares of the latter were transferred in the name of the wife of V.D J.M.P.J also resigned from the Board of Directors on or about January 31, 1959. Since that date and until October, 1965, the Board of Directors of the Company consisted of R.P.J, P.C.J and V.D.J In or about the month of October, 1965, V.D.J got his son, Vinode Kumar Jhunjhunwalla, appointed as the Technical Director of the Company.10. Since the year 1958 and until February 26, 1965, the entire business of the Company has been the manufacture and supply of railway sleepers in execution of government contracts. The business of the Company during this period had been always managed by R.P.J, P.C.J under the general supervision and guidance of V.D.J and the business policy was always dictated by V.D.J The cashier, manager-cum-engineer, munim, and cash peon and other important officers and employees were always appointed by V.D.J of his own choice and on his terms. R.P.J has been acting as the Director-in-charge throughout since his appointment at a Board meeting held on November 23, 1957. V.D.J asked for and received daily reports of the working of the factory and of the business of the Company from R.P.J and gave detailed instructions even relating to the daily administration. From 1959 onwards the factory commenced its regular production of railway sleepers and made substantial profits between 1960 and 1965 except in the year 1961 when there was some loss.11. It is alleged that after trying to take wrongfully and illegally full control and management of the affairs of the Company in order to oust R.P.J group, V.D.J ultimately succeeded in getting hold of Directors' minute books and the minute books of the general meetings of the Company. V.D.J with the help of the members of his group, wrongfully and illegally took away the keys and the other statutory books and documents of the Company from the registered office and refused R.P.J group any access to them. R.P.J was also assaulted by an employee of the Company at the instance of V.D.J and there were some criminal proceedings against R.P.J and P.C.J V.D.J as a Director called a meeting of the Board on May 27, 1966, by notice dated May 24, 1966. R.P.J's solicitors on May 27, 1966, sent a notice to the Company and V.D.J calling upon them to desist from holding the meeting which was called with a view to oust the R.P.J group completely from the control and management of the affairs of the Company. V.D.J group did not pay any heed to the solicitors' letter and passed various resolutions in the Board's meeting held on May 27, 1966, whereby the previous resolutions of the Board were countermanded and cancelled and R.P.J was deprived of his all lawful authority and powers as a Director including the right to operate the banking account of the Company. R.P.J was purported to be removed from the office of the Director-in-charge of the Company. V.D.J group caused an advertisement to be published in the Vishwamitra on or about May 20, 1966, intimating the cancellation of powers in favour of R.P.J V.D.J taking advantage of the majority holding of shares by himself and the members of his group, caused to be issued through certain shareholders belonging to his group a requisition dated May 28, 1966, for calling an extraordinary general meeting with a view to remove R.P.J and P.C.J as directors of the Company and to appoint other persons belonging to their group in their places instead. The explanatory statement to that notice alleged that there was a loss of about Rs 8 lakhs in the year 1965.12. It is further alleged that V.D.J with the help of goondas and armed guard took possession of the Company's factory and ousted R.P.J and P.C.J therefrom. It is also alleged that the liabilities of the Company would exceed its assets and the same was not commercially solvent. That serious disputes and differences had arisen among the shareholders of the Company and there was a complete deadlock in the management of its affairs. There was also complete loss of confidence of one group in the other. Lastly it is averred that the Company was in substance a partnership and it could not carry on its business any more and the circumstances would justify the dissolution of the Company had it been a partnership.13. The above are the allegations in the winding-up petition which came up for admission before the learned Company Judge. There was a counter-affidavit filed by V.D.J in opposing the prayers. We may only note para 14 of his counter-affidavit:“The respondent, Raghunath Prasad Jhunjhunwalla was an employee of the firm of Messrs Kamlapati Motilal of Kanpur of which I am the managing partner. Having gained confidence as such employee the said Raghunath Prasad Jhunjhunwalla was taken in as a Director of the Company and entrusted with the powers of management of the Company. The respondents had no money to subscribe for the shares of the Company and moneys were procured by me to enable them to subscribe for the shares of the Company. The applicants on their own admission were in charge of the management of the affairs of the Company. While in such management they have mismanaged the affairs of the Company and misappropriated the funds and assets of the Company as would appear from the statements made in my affidavit affirmed on June 16, 1966 ....”14. The only point which appears to have been canvassed before the learned Company Judge and later before the appellate court was that the Company was formed as a result of mutual trust and confidence and the Company was in substance a partnership and, therefore, the principles of partnership would be attracted. The same arguments are pressed into service by the respondents before us. If it were a partnership, says Mr Sen on behalf of the respondents, on the facts and circumstances disclosed in the petition, dissolution would have been ordered by the court under Section 44 (g) of the Partnership Act. A case for winding-up has been, therefore, prima facie, made out by the respondents, on these allegations. It is submitted that the learned Company Judge committed an error of law in dismissing the winding-up petition without admitting it and in allowing the stay petition of the Company (“appellant” herein) and that the Division Bench in the letters Patent appeal was right in setting aside the order of the Company Judge.15. According to the learned Company Judge the principle of dissolution of partnership applies to companies either on the ground of complete deadlock or on the ground of domestic or family companies. A complete deadlock, according to the learned Judge, is where the Board has two real members or the ratio of shareholding is equal. In the domestic or family companies, says the learned Judge, courts have applied the dissolution of partnership principle where shareholdings are more or less equal and there is ousting not only from management but from benefits as shareholders. Lack of probity has to result in prejudice to Company's business, affecting rights of complaining parties as shareholders and not as directors. The learned Judge relied on an English case (In Re Cuthbert Cooper & Sons Limited1) which illustrates that if a deadlock can be resolved by the articles there is no deadlock to bring in winding-up and if there are alternative remedies the Company should not be wound up. The learned Judge was also unable to hold that the substratum of the company was gone. The learned Judge concluded as follows:“As I have indicated these charges and counter-charges raise disputed questions of fact between two contesting parties for power. The petitioners desire that they should be in power and the respondents would go on financing. This was said to be the heart of the matter by counsel for the respondents. This comment is not without foundation. I am unable to hold that there is any mismanagement or misapplication either as regards shareholders or as regards directors. Directors' disputes are not grounds for winding-up on the facts and circumstances of the present case.”According to the learned Judge the case of In Re Yenidje Tobacco Company Limited2 and the cases following it have established that in applying the principles of dissolution of partnership to companies the following factors were important :“(1) Equal shareholding.(2) Complete deadlock in the administration of the Company.(3) Lack of probity and mismanagement in the conduct of affairs of the Company.The learned Company Judge held that the principle in Yenidje case was not attracted in this case.16. On the other hand, according to the appellate court the principles in Yenidje case were to the effect that“if a private Company could be fairly called a partnership in the guise of a private Company then the things which might be a ground for dissolution of a partnership will apply also in the case of a private Company and that in this connection deadlock is not material.”The appellate court then described the circumstances which according to Lindley justify the dissolution of the partnership:“(1) if the partnership agreement is wilfully or persistently violated;(2) if one partner so behaves in matters relating to the partnership business that the other partners find it impossible to carry on business in partnership with him;(3) if some partners are in effect excluded from the concern;(4) if the misconduct of one or more partners is such that the mutual confidence which must subsist in a partnership is destroyed;(5) if there is a state of animosity which precludes all reasonable hope of reconciliation and friendly cooperation;(6) if it is impossible for the partners to place that confidence in each other which each has a right to expect, provided that the impossibility has not been caused by the persons seeking to take advantage of it.”Having noted the above, the appellate court held that conditions (2), (3) and (4) were unquestionably fulfilled in this case and, therefore allowed the application and rejected the stay application.”17. Before we proceed further we may refer to a recent decision of the House of Lords in Ebrahimi and Westbourne Galleries Ltd.3 (briefly Ebrahimi case wherein after reviewing all the earlier cases it was held as follows:“The foundation of it all lies in the words ‘just and equitable’ and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force. The words are a recognition of the fact that a limited Company is more than a mere legal entity, with a personality in law of its own; that there is room in Company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the Company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the Company is large or small. The ‘just and equitable’ provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a Company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way....The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements:(i) an association formed or continued on the basis of a personal relationship, involving mutual confidence — this element will often be found where a pre-existing partnership has been converted into a limited Company;(ii) an agreement, or understanding, that all, or some (for there may be ‘sleeping’ members), of the shareholders shall participate in the conduct of the business;(iii) restriction upon the transfer of the members' interest in the Company — so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.”18. The respondents have laid great emphasis on the ratio of the above decision. It is true that Section 222(f) of the English Companies Act, 1948 which the House of Lords was considering corresponds to Section 433(f) of the Act. In the above decision the House of Lords had to deal with a private limited Company consisting of three members, the petitioner therein, being one of the three. Lord Wilberforce delivering his reasoned speech has himself noted that“it is a fact of cardinal importance that since about 1945 the business had been carried on by the appellant and Mr Nazar as partners, equally sharing the management and the profits”.It was also noticed that“the Company made good profits, all of which were distributed as directors” remuneration. No dividends have ever been paid, before or after the petition was presented.”19. In Ebrahimi case the Company which was first formed by the two erstwhile partners, Ebrahimi and Nazar, was joined by Nazar's son, George Nazar, as the third director and each of the two original shareholders transferred to him 100 shares so that at all material times Ebrahimi held 400 shares, Nazar 400 shares and George Nazar 200 shares. The Nazars, father and son, thus had a majority of the votes in general meeting. Until the dispute all the three remained directors. Later on an ordinary resolution was passed by the Company in general meeting by the votes of Nazar and George Nazar removing Ebrahimi from the office of director. That led to the petition for winding-up before the court.20. The following features are found in Ebrahimi case:“(1) There was a prior partnership between the only two members who later on formed the Company.(2) Both the shareholders were directors sharing the profits equally as remuneration and no dividends were declared.(3) One of the shareholders' son acquired shares from his father and from the second shareholder, Ebrahimi, and joined the Company as the third shareholder — director with two hundred shares (one hundred from each).(4) After that, there was a complete ouster of Ebrahimi from the management by the votes of the other two directors, father and son.(5) Although Ebrahimi was a partner, Nazar had made it perfectly clear that he did not regard Ebrahimi as a partner but regarded him as an employee in repudiation of Ebrahimi's status as well as of the relationship.(6) Ebrahimi through ceasing to be a director lost his right to share in the profits through directors' remuneration retaining only the chance of receiving dividends as a minority shareholder.”Bearing in mind the above features in the case, the House of Lords allowed the petition for winding-up by reversing the judgment of the court of appeal and restoring the order of Plowman, J.21. None of the parties questions the principles as such adumbrated by the House of Lords in Ebrahimi caseor even those in the earlier Yenidje case and indeed these are sound principles depending upon the nature, composition and character of the Company. The principles, good as they are, their application in a given case or in all cases, generally, creates problems and difficulties. The respondents' counsel is well cognizant of this difficult aspect and, therefore, rests his argument on the footing that the Company is in substance a partnership and necessarily, therefore, according to him, the principles of partnership should be attracted.22. Before we come to the facts of the present case, we have to deal with the principles of the Yenidje case which were the cornerstone of the arguments on behalf of both the parties before the Company Judge as well as the appellate court. Ebrahimi case was not available to the parties at that stage.23. Yenidje case has acquired celebrity and in application of the ratio of that case varying shades and colour have been sought to be given from time to time in England appropriate to occasions and to facts and circumstances of cases coming before the courts.24. It is not necessary for us to go over the labyrinth of cases wherein the Yenidje principle was applied and it will be sufficient to gather the ratio from the words of Lord Cozens-Hardy, M.R expressed in the decision itself. The learned Master of Rolls posed the question thus in that case:“I think it right to consider what is the precise position of a private Company such as this and in what respects it can be fairly called a partnership in the guise of a private Company.”25. This was a Company of two shareholders and two directors who had earlier traded separately but amalgamated their business and formed a private limited Company. The Constitution of the Company was such that under its articles of association for any case of difference or dispute between the directors there was a provision for arbitration. In fact in one of such disputes a reference was made to arbitration which resulted in an award to which one of the two shareholders declined to give effect. It was proved in that case that the two directors were not on speaking terms, that the so-called meetings of the board of directors had been almost a farce or comedy, the directors would not speak to each other on the board, and some third person had to convey communications between them which ought to go directly from one to the other. Under the above situation it was observed by the learned Master of Rolls as follows:“Is it possible to say that it is not just and equitable that that state of things should not be allowed to continue, and that the Court should not intervene and say this is not what the parties contemplated by the arrangement into which they entered?* * *Certainly, having regard to the fact that the only two directors will not speak to each other, and no business which deserves the name of business in the affairs of the Company can be carried on, I think the Company should not be, allowed to continue. I have treated it as a partnership, and under the Partnership Act of course the application for a dissolution would take the form of an action; but this is not a partnership strictly, it is not a case in which it can be dissolved by action. But ought not precisely the same principles to apply to a case like this where in substance it is a partnership in the form or the guise of a private Company? It is a private Company, and there is no way to put an end to the state of things which now exists except by means of a compulsory order. It has been urged upon us that the just and equitable clause ... has ... been held ... not to apply except where the substratum of the Company has gone or where there is a complete deadlock. Those are the two instances which are given, but I should be very sorry, so far as my individual opinion goes, to hold that they are strictly the limits of the ‘just and equitable’ clause as found in the Companies Act.If ever there was a case of deadlock I think it exists here; but, whether it exists or not, I think the circumstances are such that we ought to apply, if necessary, the analogy of the partnership law and to say that this Company is now in a state which could not have been contemplated by the parties when the Company was formed and which ought to be terminated as soon as possible.”26. It is clear that although Yenidje case was a case of a complete deadlock, that was not stated to be the sole basis for a conclusion to wind up the Company. The House of Lords in Ebrahimi case approved the decision in Yenidje case. We may also point out that the House of Lords did not approve of the undue emphasis put on the contractual rights arising from the articles over the equitable principles, derived from partnership law in In Re Cuthbert Cooper & Sons Limited.27. We may also refer to the Privy Council decision in Loch v. John Blackwood Limited1924 AC 783 wherein Section 127 of the Companies Act, 1910, of Barbados, identical with Section 433(f) of the Act was considered. Lord Shaw of Dunfermline quoted in the judgment a passage from the case of Baird v. Lees 1924 SC 83 Scotland, which is as follows:“I have no intention of attempting a definition of the circumstances which amount to a ‘just and equitable’ cause. But I think I may say this. A shareholder puts his money into a Company on certain conditions. The first of them is that the business in which he invests shall be limited to certain definite objects. The second is that it shall be carried on by certain persons elected in a specified way. And the third is that the business shall be conducted in accordance with certain principles of commercial administration denied in the statute, which provide some guarantee of commercial probity and efficiency. If shareholders find that these conditions or some of them are deliberately and consistently violated and set aside by the action of a member and official of the Company who wields an overwhelming voting power, and if the result of that is that, for the extrication of their rights as shareholders, they are deprived of the ordinary facilities which compliance with the Companies Act would provide them with, then there does arise, in my opinion, a situation in which it may be just and equitable for the Court to wind up the Company.”28. We may also refer to another decision of the Privy Council in D. Davis & Co. Ltd. v. Brunswick (Australia) Ltd. AIR 1936 PC 114 which was from the decision of the Full Court of the Supreme Court of New South Wales. Section 84(e) of the New South Wales Companies Act (1899) also provides for winding-up, inter alia, on just and equitableground. In dealing with that clause, the Privy Council observed as follows:“The position of the Court in determining whether it is just and equitable to wind up the Company requires a fair consideration of all the circumstances connected with the formation and the carrying on of the Company during the short period which had elapsed since May 12, 1930; and the common misfortune which had befallen the two shareholders in the Company does not, in Their Lordships view, involve the consequence that the ultimate desires and hopes of the ordinary shareholders should be disregarded merely because there is a strong interest in favour of liquidation naturally felt by the holders of the preference shares.Nor on the other hand can any general rule be laid down as to the nature of the circumstances which have to be borne in mind in considering whether the case comes within the phrase.”29. This Court had to deal with the “just and equitable' clause under Section 162(vi) of the Indian Companies Act, 1913, in Rajahmundry Electric Supply Corporation Ltd. v. A. Nageswara Rao AIR 1956 SC 213 and the Court quoted with approval the following passage in Loch's case:“It is undoubtedly true that at the foundation of applications for winding-up, on the ‘justand equitable’ rule, there must lie a justifiable lack of confidence in the conduct and management of the Company's affairs. But this lack of confidence must be grounded on conduct of the directors, not in regard to their private life or affairs, but in regard to the Company's business. Furthermore the lack of confidence must spring not from dissatisfaction at being outvoted on the business affairs or on what is called the domestic policy of the Company. On the other hand, wherever the lack of confidence is rested on a lack of probity in the conduct of the Company's affairs, then the former is justified by the latter, and it is under the statute just and equitable that the Company be wound up.”30. Again in Mohan Lal v. Grain Chamber Ltd., Muzaffarnagar AIR 1968 SC 772 this Court had held that:“Primarily the circumstances existing at the date of the petition must be taken into consideration for determining whether a case is made out for holding that it is just and equitable that the Company should be wound up.”[See also Rajahmundry Electric Supply Corporation case and S.P Jain v. Kalinga TubesLtd.9]31. Keeping the ratio of Ebrahimi case in the forefront of his argument Mr Sen submits that in the present case also there was a definite understanding and agreement between the two family groups for equal status and equal participation in management and, therefore, exclusion of the respondents from the directorship is burial of mutual trust and denial of that relationship on which alone the Company was formed and hence there is a prima facie case for admitting the petition.32. Although the Indian Companies Act is modelled on the English Companies Act, the Indian law is developing on its own lines. Our law is also making significant progress of its own as and when necessary. Where the words used in both the Acts are identical, the English decisions may throw good light and reasons may be persuasive. But as the Privy Council observed long ago in Ramanandi Kuer v. Kalawati Kuer AIR 1928 PC 2“it has often been pointed out by this Board that where there is a positive enactment of the Indian legislature, the proper course is to examine the language of that statute and to ascertain its proper meaning — uninfluenced by any considerations derived from the previous state of the law or of the English law upon which it may have been founded”.If it was true in the twenties it is more apposite now that the background, conditions and circumstances of the Indian society, the needs and requirements of our country call for a somewhat different treatment. We will have to adjust and adapt, limit or extend, the principles derived from English decisions, entitled as they are to great respect, suiting the conditions of our society and the country in general, always, however, with one primary consideration in view that the general interests of the shareholders may not be readily sacrificed at the altar of squabbles of directors of powerful groups for power to manage the Company.33. When more than one family or several friends and relations together form a Company and there is no right as such agreed upon for active participation of members who are sought to be excluded from management, the principles of dissolution of partnership cannot be liberally invoked. Besides, it is only when shareholding is more or less equal and there is a case of complete deadlock in the Company on account of lack of probity in the management of the Company and there is no hope or possibility of smooth and efficient continuance of the Company as a commercial concern, there may arise a case for winding-up on the just and equitable ground. In a given case the principles of dissolution of partnership may apply squarely if the apparent structure of the Company is not the real structure and on piercing the veil it is found that in reality it is a partnership. On the allegations and submissions in the present case, we are not prepared to extend these principles to the present Company.34. The principle of “just and equitable” clause baffles a precise definition. It must rest with the judicial discretion of the court depending upon the facts and circumstances of each case. These are necessarily equitable considerations and may, in a given case, be superimposed on law. Whether it would be so done in a particular case cannot be put in the straitjacket of an inflexible formula.35. In an application of this type allegations in the petition are of primary importance. A prima facie case has to be made out before the court can take any action in the matter. Even admission of a petition which will lead to advertisement of the winding-up proceedings is likely to cause immense injury to the Company if ultimately the application has to be dismissed. The interest of the applicant alone is not of predominant consideration. The interests of the shareholders of the Company as a whole apart from those of other interests have to be kept in mind at the time of consideration as to whether the application should be admitted on the allegations mentioned in the petition.36. The question that is raised in this appeal is as to what is the scope of Section 433(f) of the Act. Section 433 provides for the circumstances in which a Company may be wound up by the court. There are six recipes in this section and we are concerned with the sixth, namely, that a Company may be wound up by the court if the court is of the opinion that it is just and equitable that the Company should be wound up. Section 222(f) of the English Companies Act, 1948 is in terms identical with the Indian counterpart. Section 433(f). It is now well-established that the sixth clause, namely, “just and equitable” is not to be read as being ejusdem generis with the preceding five clauses. While the five earlier clauses prescribe definite conditions to be fulfilled for the one or the other to be attracted in a given case, the just and equitable clause leaves the entire matter to the wide and wise judicial discretion of the court. The only limitations are the force and content of the words themselves, “just and equitable”. Since, however, the matter cannot be left so uncertain and indefinite, the courts in England for long have developed a rule derived from the history and extent of the equity jurisdiction itself and also born out of recognition of equitable considerations generally. This is particularly so as Section 35(6) of the English Partnership Act, 1890 also contains, inter alia, an analogous provision for the dissolution of partnership by the court. Section 44(g) of the Indian Partnership Act also contains the words “just and equitable”.37. Section 433(f) under which this application has been made has to be read with Section 443(2) of the Act. Under the latter provision where the petition is presented on the ground that it is just and equitable that the Company should be wound up, the court may refuse to make an order of winding-up if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the Company wound up instead of pursuing that other remedy.38. Again under Sections 397 and 398 of the Act there are preventive provisions in the Act as a safeguard against oppression in management. These provisions also indicate that relief under Section 433(f) based on the just and equitable clause is in the nature of a last resort when other remedies are not efficacious enough to protect the general interests of the Company.39. Coming to the present case we find that the Company was formed first with R.P.J and Anil Chandra Dutta. Anil Chandra Dutta was admittedly an employee of V.D.J and it is also claimed that even R.P.J was an employee of a Company in which V.D.J was a managing partner. Although the entire finance was to be arranged by V.D.J, it appears the Company was started by the above two persons with V.D.J remaining in the background. Anil Chandra Dutta soon resigned and other people came in and in 1965-66 there were 19 shareholders, nine headed by R.P.J and ten headed by V.D.J, clearly showing two family groups — R.P.J group had 1875 shares and V.D.J group had 3125 shares. V.D.J stood guarantee for bank overdraft to the tune of Rs 47 lakhs and as the learned Company Judge has noted the stake of the appellant in the Company was about Rs 63 lakhs as opposed to the stake of the respondents amounting to Rs 187 lakhs. It is, therefore, clear that R.P.J group's interest in the Company was not of the same magnitude as that of the appellants. The learned Company Judge put the picture as follows:“The entire affidavit evidence brings in the forefront two broad features. First, that there are disputes between the petitioners and the respondents regarding appointment of Vinode Kumar Jhunjhunwalla and Hariram Modi. It is said on behalf of the petitioners that those appointments in breach of articles and in breach of the provisions of the companies act are adequate grounds for winding up. It is, on the other hand, said by the respondents that the allegations of breach of articles and provisions of the Act are denied and these are the subject-matter of remedy by suit and are not the subject-matter of winding up. The other feature is that the respondents charge the petitioners with misappropriation. The petitioners also charge the respondents with having utilised the funds of the Company.”40. Is this Company, in substance a partnership or in the image of a partnership as claimed? We may now address to this aspect strenuously emphasised by Mr Sen. If, as in Ebrahimi case there had been an earlier partnership and the partners later on formed into a Company, the matter would have stood on a different footing. In the present case, however, we do not find any special features which would unquestionably lead to the conclusion that the Company is in substance a partnership. On the other hand the following aspects are noteworthy.41. Assuming partnership had been contemplated, the idea was deliberately abandoned. The Company was started with one Anil Chandra Dutta who was no relation of the two families but was an employee of V.D.J This would negat the idea of partnership which connotes equal status amongst the partners. While it is true that a director may work in the Company on remuneration, R.P.J, however, served like an employee on monthly salary not on his own initiative enjoying an equal partner's freedom and prestige but directly under the supervision and control of V.D.J acknowledging a status definitely of a subordinate character. The voluntary financial involvement of a large stake by V.D.J carefully sought to be protected against erosion of his interests by constant vigil on the day-to-day working does not fit in with the concept of a partnership.42. All the above features do not enable us to accept the submission of the respondents that the Company in this case is in substance a partnership.43. In the present case there is yet another important feature against the respondents. Serious trouble apparently arose on or about May 23, 1966, when a Board meeting was notified. Prior to that even though something might, perhaps, be brewing inside, but nothing came to the surface although the respondents alleged that V.D.J's son, Vinode Kumar Jhunjhunwalla, had been sent to the States at Company's expense and was later on, after completion of education, appointed as Technical Director and that all these were illegal actions. It is significant that R.P.J group was present in the meeting when these resolutions were passed and they made no grievance at the time about the same. The petition for winding-up was filed on June 7, 1966 and the foundation for it was laid in the solicitors' letter to the appellants on May 27, 1966. That may be said to be the nucleus of the dispute so far as the records show.44. It is not a proper principle to encourage hasty petitions of this nature without first attempting to sort out the dispute and controversy between the members in the domestic forum in conformity with the articles of association. There must be materials to show when “just and equitable” clause is invoked, that it is just and equitable not only to the persons applying for winding-up but also to the Company and to all its shareholders. The Company court will have to keep in mind the position of the Company as a whole and the interests of the shareholders and see that they do not suffer in a fight for power that ensues between two groups.45. The cases of small companies stand on a different footing from a Company like the present with nineteen shareholders, although apparently arrayed in two groups. It is not, prima facie, established on the allegations that the Company cannot run smoothly in the best interest of the general shareholders, including the R.P.J group, after exit of the quondam directors.46. The conclusion of the Division Bench that the Company is in substance a partnership venture was based on the following principal reasons:“(1) The original idea was to start a partnership venture and that idea was given ultimately the shape of a private Company.(2) The sir khata account shows that the starting on a partnership venture the parties set up a private Company.(3) The shareholding shows division amongst two family groups.(4) There was no denial by the appellants of a specific averment of the respondents that the Company was in substance a partnership.(5) The respondents were all along functioning as working partners and the respondent, V.D.J, was the financial partner.”47. We will examine each of these reasons.48. With regard to the first reason, the solicitors' letter of May 27, 1966, which is the nucleus of the subsequent winding-up petition filed in court is of great significance and the improvement in the version later in the petition will lose its importance. It was stated in the solicitors' letter that“sometime in May 1956 it was agreed between our client Shri R.P Jhunjhunwalla and Shri V.D Jhunjhunwalla and Shri Mahabir Prasad Jhunjhunwalla to do some type of business in partnership. Shri V.D Jhunjhunwalla suggested that a limited Company should be formed in which our client could hold shares to the extent of -/6 annas and Shri V.D Jhunjhunwalla and Shri Mahabir Prasad Jhunjhunwalla to the extent of annas -/10 and that our client would manage the business of such Company as and when it was formed and that the requisite finance for the working of the Company would be made by Shri V.D Jhunjhunwalla and Shri Mahabir Prasad Jhunjhunwalla”.49. There is nothing in the above para which is the corner-stone of the plea of partnership in substance that there was any active contemplation about forming of a partnership. Reference to “some type of business of partnership” is very casual in the above extract. On the other hand, it is more reasonable to conclude that although there might have been discussion about the advantages and disadvantages of partnership vis-a-vis a private limited Company, no time was lost in deciding to form a Company. If this is the only basis of agreement between the parties to sustain the claim, we are unable to accept the same.50. Regarding the second reason, the sir khata account which has been heavily relied upon to found an agreement or understanding is wholly misconceived. It merely shows that a joint account was, for the time being opened for the purpose of the formation of the Company and the account was closed on such formation. It does not indicate any understanding as to the right of management of the Company by any group of shareholders. Thirdly, because the shareholding is between two family groups, it cannot be said that the Company thereby takes the image of partnership. On the other hand, the fact that after discussion, the parties deliberately abandoned the idea of forming a partnership would go to show that there was no intention to carry on business as partners. Fourthly, after going through the correspondence it is not possible to say that there was no denial of the averment by the respondents that the Company was in substance a partnership. Apart from anything else it is enough to point out that in the letter of V.D.J dated June 3, 1963, the allegations have been clearly denied. It is, therefore, a very weak reason to reckon. With regard to the last reason, it appears that the respondents themselves took the position in their petition that R.P.J was managing the affairs of the Company under daily supervision and control of V.D.J Whether this position is accepted by the appellants or not, their statement in that respect gives no indication of their right to manage the business as a working partner as claimed. Besides, working on remuneration by a director is not an unknown feature even in Company business and we have already adverted to the status in which he worked. Nothing, therefore, turns on this feature. All the above reasons, therefore, fail to convince us that the conclusion of the Division Bench that the Company is in substance a partnership, is correct.51. We should observe, however, that nothing observed by us in this appeal may be taken as expression of any opinion on the merits of the allegations and counter-allegations of the parties.52. In the result the appeal is allowed with costs. The judgment of the Division Bench is set aside. The winding-up petition stands dismissed and the stay petition of the appellant is allowed.

When an employer (after having gotten PERM labor certification) files an initial visa petition (Form I-140) for an EB-1 worker to receive a green card (that is, to become a permanent resident), it must include a large number of supporting documents. These serve to prove that the would-be immigrant has the necessary background and qualifications to apply in the priority worker category and that fit the offered job. Below is a handy checklist of the documents that will be needed within each subcategory of the EB-1 employment visa. For Applicants in the Persons of Extraordinary Ability Subcategory (EB-1A) If the employee is seeking EB-1A status, the visa petition will need to include the following: * Evidence that the employee has either received a major, internationally recognized award (like a N(more)