Due to mismanagement, a significant number of members of XYZ Company Ltd. have filed a Class Action Suit against the company. Explain the concept and state the emerged claims and powers of acting members in this context.

A class action is a legal proceeding in which shareholders bring suit as a group against the company or its directors or officers and the judgment or settlement received from the suit covers all the shareholders equally. In brief, a class action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a group of defendants is being sued. The biggest advantage of class suits is the economics of aggregation. These lawsuits will also prevent multiplicity of litigations thus, saving the valuable time of the courts and also the valuable time, money and energy of shareholders. The incorporation of the provision of Class Action Suit under the Companies Act, 2013 will certainly usher a new era where investor's interest shall be protected. A class action suit will also be a big relief to small investors, especially for small claims that would be expensive to litigate. Section 245 of the Companies Act, 2013 gives additional rights to minority shareholders in case of oppression and mismanagement. For companies with a share capital, 100 members or 10% shareholders whichever is less or member(s) holding at least 10% shareholding in the company and for a company without share capital, 1/5th total members can collectively approach the NCLT if they find that the company's affairs are not being managed in its best interests for redressing the situation. The members of XY Ltd. may exercise their rights if they are of the opinion that the management or conducts of the affairs of the company are being conducted in a manner prejudicial to the interests of the company to prevent: the company from committing an act which is ultra vires the articles or memorandum of the company; to restrain the company from committing breach of any provision of the company's memorandum or articles; to declare a resolution altering the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors; to restrain the company and its directors from acting on such resolution; to restrain the company from doing an act which is contrary to the provisions of this Act or any other law for the time being in force; to restrain the company from taking action contrary to any resolution passed by the members. to claim damages or compensation or demand any other suitable action from or against the company or its directors for any fraudulent, unlawful or wrongful act or omission or conduct or any likely act or omission or conduct on its or their part; the auditor including audit firm of the company for any improper or misleading statement of particulars made in his audit report or for any fraudulent, unlawful or wrongful act or conduct; or any expert or advisor or consultant or any other person for any incorrect or misleading statement made to the company or for any fraudulent, unlawful or wrongful act or conduct or any likely act or conduct on his part; to seek any other remedy as the Tribunal may deem fit. Further they can claim damages or compensation for any misstatement, fraudulent, unlawful or wrongful act from the company or its directors Auditors and audit company (example: misleading statement in audit report) Advisors, Consultants, Experts