StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Rights of Minority in Companies - Essay Example

Cite this document
Summary
The paper "Rights of Minority in Companies" discusses that the effective protection of the rights of the members of each corporation has been a critical issue for legislators worldwide. Rules have been set for ensuring that all organizational stakeholders are adequately protected…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.9% of users find it useful
Rights of Minority in Companies
Read Text Preview

Extract of sample "Rights of Minority in Companies"

?Examine critically the rights of minority in a company when the notice to acquire their shares has been served. Introduction The effective protection of the rights of the members of each corporation has been a critical issue for legislators worldwide. Rules have been set for ensuring that all organizational stakeholders are adequately protected. However, under certain terms, the above rules cannot be enforced. Conflicts of interests between employees, managers and shareholders lead to the deterioration of communication within the organization. In such environment, the protection of rights of minority shareholders, whose power to fight for the protection of their rights is limited, cannot be promoted. Current paper focuses on the examination of the rights of minority shareholders especially in the case that the notice to acquire their shares has been served. The relevant provisions of the Company Act 2006 have been studied, along with the literature published in the particular issue. It is proved that the law gives to the minority shareholders the right to promote the protection of their interests. However, when the notice to acquire their shares has been served to the minority shareholders, then their potentials for protecting their rights are reduced. Still, there are certain legal tools that can help the minority shareholders to secure their share in a particular organization. The effectiveness of these tools is further depended on a series of factors; the perceptions of minority shareholders on their organization and their skills to manage such projects highly affect the success of the efforts of the minority shareholders to secure their position as valuable members of the organization. Rights of minority in companies – overview The role and the rights of minority in modern corporations have been highly studied in the literature. The reference to the rights of minority shareholders in general is necessary in order to understand the potentials of the particular group of persons to seek for legal tools for protecting their rights after a notice to acquire their shares has been served. According to the most common view, minority shareholders have a major disadvantage compared to the majority shareholders: ‘they are not protected by shareholder decision rights’ (Kraakman 2009, p.195). On the other hand, minority shareholders can choose among different legal means for protecting their rights; reference can be made, for example, to the ‘sharing norms, rules and standards’ (Kraakman 2009, p.195). In this context, minority shareholders are given the chance to prohibit outside investors to enter the organization. Indeed, minority shareholders are allowed to make an offer for buying the shares of their organization before these shares are offered to the public in general (Kraakman 2009, p.195). The above right of minority shareholders is part of the ‘preemptive rights framework’ (Kraakman 2009,195). At this point, the rights of minority shareholders are considered as secured, a fact that results to the improvement of communication within the organization, meaning especially the communication between the majority shareholders and the minority shareholders, who are, by the law, vulnerable towards the majority shareholders who can control organizational decisions. However, the power of the above rule has been strongly criticized. More specifically, it is noted that the potential of minority shareholders ‘to refer to the preemption rule’ (Kraakman 2009, p.195) can be limited if such decision is developed by the shareholders. On the other hand, the common law rules seem to protect the minority shareholders more effectively compared to the civil law rules (Mallin 2007). Still, it should be noted that the protection of minority shareholders has not always set as a priority in the UK legal system (Mallin 2007). This fact indicates the potential inability of legislators to realize the level of risks that minority shareholders have to face. Sheikh (2008) emphasizes on the weakness of the existing laws to protect the interests of minority shareholders. According to the above researcher, ‘periodically, the Law Commissions of England and Wales and Scotland’ (Sheikh 2008, p.54) cooperate in order to make improvements to existing corporate laws. Reference is made in particular to the extensive reform on Company law in 1997 due to the gaps that were retrieved in regard to the protection of minority shareholders (Sheikh 2008). Sheikh (2008) notes that the key problems that companies have to face are the following ones: directors in companies tend to act independently, without taking into consideration the interests of minority shareholders. This practice has been extensive and has led to the increase of the phenomenon of unfair prejudice in companies across UK (Sheikh 2008). In 1997, the Law Commission identified two major issues regarding the effective use of laws aiming to protect the interests of minority shareholders: these laws were quite complex, their processes were not clear while the time required for the completion of all their phases was high (Sheikh 2008). In this way, minority shareholders were discouraged from bringing a case before the courts or using, in general, the rights awarded to them by the law. At the next level, the existing law in regard to the protection of minority interests focused on the right of the company to initiate the proceedings against directors and majority shareholders that have violated the law or the terms of the articles of association. The Companies Act 2006 aimed to cover the above gaps improving the protection provided to minority shareholders. The key characteristics of the UK law in regard to the protection of the interests of minority are described in the study of Mitchell (1994); according to Mitchell the UK law can be characterized as more effective, compared to the US or Australian law, in regard to the protection provided to minority shareholders. It is explained that in UK the misbehaviour of directors and of the majority shareholders can be used for setting allegations for fraud (Mitchell 1994); in USA and Australia there is no such case; there, directors have just ‘a fiduciary duty toward the minority’ (Mitchell 1994, p.92). An important aspect of the rights of minority shareholders in UK has been the lack of their standardization. In other European countries, like Germany, the market trends seem to reject similar solutions; instead, in the above country, ‘the preemptive rights are characterized as mandatory’ (Kraakman 2009, p.195). In other countries, such as Japan and France, such conditions have not been applied; in these countries, the preemptive rights cannot be easily used in favour of the minority shareholders unless a preemption clause has been included in the shareholder agreement. However, when referring to public listed company, ‘preemptive rights are always mandatory’ (Kraakman 2009, p.195). This means that for companies of this characteristic the particular process is always available; from another point of view, this fact indicates that the protection of minority shareholders in these firms is more effective. In any case, minority shareholders have a series of rights, which are available to all shareholders of each organization. An indicative example is the ‘information right of shareholder’ (Vries 2010, p.113). The Court reviewed the specific issue in the case Re a Company. In the above case, the following problem was explored: at what level directors are obliged to inform shareholders in regard to bids made for the acquisition of the firm’s shares. The Court held that, indeed, the directors of each firm have the responsibility to inform shareholders on all critical issues related to their organization; at the same time, it is noted that directors are not obliged to provide to the shareholders a full view of all bids made on the organization. They are just obliged to provide true information, but only at some level, in regard to the organization’s performance in general, including information on the expected performance of the organization within a particular region. Moreover, minority shareholders are given the right to ask by the Court for an order, using the s994 of the Companies Act 2006, on the basis that the majority shareholders have failed in managing the affairs of the company effectively; the above behaviour of majority shareholders is also known as ‘unfair prejudice’ (s 994 CA 2006). In this way, a petition can be submitted to the Court for an order; this order could terminate the negotiations between the shareholders or it could also lead to the breach of the shareholder agreement. At the next level, the order could suggest the purchase of the shares of the petitioner at a fair value; the particular process is analysed in the section that follows. The UK Company Law has been developed in such way that the development of strong groups of shareholders is discouraged. The specific issue is discussed in the study of Frederikslust and Ang (2008). Indeed, the above researchers note that the UK Company Law states that when a shareholder has acquired the 30% of a corporation’s shares, an offer must be made for the rest of the shares, so that the acquisition of a high percentage of shares by only one shareholder is avoided (Frederikslust and Ang 2008, p.194). However, the above practice cannot significantly help towards the protection of the rights of minority shareholders. Indeed, the majority shareholders tend to acquire the shares of an organization at a percentage near to 30%, just below 30% (Frederikslust and Ang 2008, p.194). In this way, the intervention of the corporation for the control of the rest of shares is avoided. Rights of minority in a company when the notice to acquire their shares has been served Under certain terms, a majority shareholder has the right to make a reasonable offer for shares aiming to avoid court proceedings. In such case, the above right of the shareholder is considered as justified. In fact, in the case O’Neill v Phillips the Court held that such offer would be accepted by the law, because of the following reason: the shareholder involved made an offer for acquiring shares that would claim using the proceedings; in other words his claim is similar with the one that would be incorporated in the proceedings (Vries 2010, p.114). For this reason, if the offer is actually reasonable, the Court would allow it. In certain cases, the above right of the Courts, to decide on the acceptance or not of a reasonable offer for acquiring shares, has been characterized as non-justified, offering the chance to the Court to develop critical decision without the rights of all members to be evaluated. Moreover, the above potential of the Court can be limited by the following factor: the perception of what is a reasonable offer can be differentiated among people. Of course, the view that a reasonable offer should respond to the value of the shares, could be also made accepted but under the following restriction: that the value of the shares has not been changed, since the initial purchase of the shares. If such reduction exists, the actual value of shares, as developed through the years, would be significantly decreased. An important criterion in order to understand the rights of minority shareholders in case that the notice to acquire their shares has been served is the following one: the Court does not have the right to intervene in issues that are related ‘to the internal management of the company’ (Goo 1994, p.12). It is not made clear though what the above term could incorporate. It is probably suggested that all issues that refer to the administration of the company, or its strategic planning could be regarded as internal issues in which courts would not be able to intervene. The above view is contradictory with the following fact: in cases of violations of the law, such as of allegations for unfair prejudice how can the court investigate the terms under which the particular action has been committed and whether it has been committed or not? This problem is analyzed in the case Grant v Switchback Railways Co (1888). On the other hand, it is not always easy to distinguish which rights of the shareholders can be characterized as personal rights and which cannot be given such description (Goo 1994, p.12). In other words, the risk for potential misinterpretation of the law is high (Goo 1994, p.12). Therefore, the minority shareholders can ask for the protection of their rights without the intervention of the Court, which however can order the termination of the shareholder agreement but only if a minority shareholder makes a relevant petition, as also explained earlier. An important problem for minority shareholder seems to exist when a notice is served by a majority shareholder in the context of the compulsory acquisition of shares of s980 of the Companies Act 2006. According to the above section, the offeror, who is usually a majority shareholder, can make an offer for purchasing the shares of a minority shareholder (Goo 1994). This offer should be at least at a level of 90% of the estimated value of the shares. After three months since he has accepted the offer, at a level of at least 90% as noted earlier, the offeror send a notice to the minority shareholder, the owner of the shares. If the above notice is validly served, then, the offeror acquires the shares of the minority shareholder even without the consent of the latter (Goo 1994). As noted in the s 980 of Companies Act 2006 no notice can be given before the period of three months since the offer was accepted, meaning the acceptance of the offer at a value of at least 90% of the value of the shares involved. The above practice can be proved particularly threatening for the organization’s stability. More specifically, the majority shareholders can use the above rule in order to obtain an order against the shares involved (Goo et al. 1994); at the next level, they can ‘sell the shares acquired to a foreign market’ (Goo et al 1994 p.90). In this way, the performance of the organization could be threatened. It is because of the above case, the law has provided to the minority shareholder the chance to protect his rights against a potential order of the court, as it can be obtained through the Courts. Moreover, the s981 of the Companies Act 2006 notes that ‘six weeks after receiving the notice for compulsory acquisition of shares’ (Goo et al. 1994, p.90) the minority shareholder has the right to submit a petition asking for the cancellation of the particular process. The chances for the minority shareholder to win the above case are many. In fact, it is possible for the court to accept that the compulsory acquisition of the shares of a particular shareholder would be in opposition with ‘the interests of all shareholders (Goo 1994, p.90). In the above case, the shareholder could be effectively protected against the potential violation of his rights. However, it would be necessary that the Court is convinced on the existence of threat against all the shareholders; otherwise, the petition of the minority shareholder to protect his right would have no result. The challenges that minority shareholders have to face when trying to protect their interests towards the majority shareholders are made clear in the case O’Neill and another v Phillips and others (1999). In the above case, the court has asked to decide whether an issue of unfair prejudice existed. After examining the facts of the case the court held that ‘the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed’ (O’Neill and another v Phillips and others 1999). This means that the terms of cooperation between a company’s shareholders are based on the shareholder agreement; of course, the violation of the laws in regard to civil liability and tort is always punished. Under these terms, a shareholder, as a member of the organization, cannot develop a claim for unfair prejudice ‘unless one of the terms of shareholder agreement has been violated’ (O’Neill and another v Phillips and others 1999). However, fairness could be also related to the ways in which each shareholder uses his power within the company; if this power is exercised in such way that equity is violated, than an issue of unfairness exists. In any case, shareholders should exercise their power and use their rights ‘in good faith’ (re Westbourne Galleries Ltd. [1973] A.C. 360 in O’Neill and another v Phillips and others 1999). The effectiveness of the Company Act 2006 in regard to the protection of the rights of minorities when the notice to acquire their shares has been served its made clear if reviewing the articles 979-981 of the particular legislative text. These articles set the following idea: the offeror who has already the capital in order to cover the 90% of the value of the shares in offer, meaning the shares of the minority shareholder, can make his intentions clear by providing a relevant notice. According to the article 979 of the Company Act 2006 the existence of such notice is a prerequisite for the validity of the offer. Also, the article 980 protects the minority shareholder by setting a period of 3 months before which no further action can be made by the majority shareholder for the acquisition of the shares of the minority shareholder. This means, that the minority shareholder has a period of 3 months to locate the capital required or to achieve a better offer through negotiations. However, at the end, if no such benefit is achieved, the minority shareholder may has to face the following situation: his shares are acquired by the majority shareholder in case that the capital necessary has not been gathered from other sources (s981); in the above case the Court can give an order for compulsory acquisition of the minority shareholder’s shares, especially if within 6 weeks after receiving the notice the minority shareholder has not managed to change the conditions of the case, i.e. to achieve a better offer (s.981). The increased risk to which minority shareholders are exposed due to the provisions of the Companies Act 2006, at least as these provisions are not appropriately applied, is proved through the study of Bernitz and Ringe (2010). The above researcher emphasizes on the following fact: in any case that the risk to which a shareholder is exposed is higher compared to the value of this shareholder’s vote, then it can be stated that the voting right of the particular shareholder is threatened. In the case under examination, the above view can be interpreted as follows: the law gives the minority shareholder the right to vote. However, the risk to which the particular shareholder is exposed can be high. For example, if the above shareholder faces the risk of losing his shares the value of which is significant, then the above situation, as described by Bernitz and Ringe (2010) results: the value of the shares is higher compared to the value of the vote. The above view leads also to the following assumption: minority shareholders may be quite vulnerable when having to vote; under the pressure of losing their shares, the value of which can be high, the minority shareholders may change their opinion in regard to their vote and follow the same line with the majority shareholders. Moreover, when the minority shareholder faces the risk of a compulsory acquisition of his shares, because there is an order of the court, then he is likely to accept the offer made by a majority shareholder even if this offer is not reasonable. At the next level, Mitchell (1994) notes that the ability of minority shareholders to protect their interests is higher than believed. Despite the existence of the process of compulsory acquisition of the minority shareholder’s shares, in practice the successful development of this process seems to be difficult (Mitchell 1994). Reference is made, as an example, to the case of WCP Limited v Gambotto & Anor (Mitchell 1994, p.93). In the above case, the majority shareholders have tried to acquire the shares of a minority shareholder, using the compulsory acquisition mechanism, as described above; however, they failed in completing the relevant process. The court supported the right of the majority shareholder to compulsory acquisition (Mitchell 1994, p.93). The above case reflects the practice of the Courts in case of a conflict between the minority and the majority shareholders. It is also made clear that no restrictions can be set to the court in regard to its decision to support the rights of majority shareholders. On the other hand, Davies (2010) notes that despite the rights given to the majority shareholders through the articles s979 to s981 of Companies Act 2006, still the British law seems to be supportive towards the minority shareholders. Davies (2010) justifies his view by referring to two mechanisms available by the UK law to minority shareholders who wish to protect their rights. These mechanisms can be used even if there is a case of a reasonable offer, as described in s 979 of the CA 2006. The first of these mechanisms is the right of a shareholder, including a minority shareholder, to make use of the provisions included in the Part II of the CA 2006 and ‘begins litigation on the basis that directors have violated their duties’ (Davies 2010, p.249). In this way, ‘derivative action begins against the directors’ (Davies 2010, p.249). This derivative action is not related to any other rights of the majority shareholders, meaning that it can be used independently of a potential order of the Court for compulsory acquisition of the minority shareholder’s shares. Moreover, it seems that the derivative action can be used also as a tool to confront the above process, if used by the majority shareholder. This means that the minority shareholder can claim that the directors of the corporation have developed activities against the law or the articles of association; in case that the above allegations are proved to be true, then the order of the Court for compulsory acquisition of the minority shareholder’s rights could be cancelled. Under these terms the potentials of minority shareholders to start a derivative action in case of allegations against the directors are the first important tool available to these shareholders for confronting the efforts of majority shareholders to acquire their shares by compulsory acquisition using a Court order. According to Davies (2010) the above legal tool is valuable for helping the minority shareholders to protect their interests; however, it is noted that the particular tool has an important weakness: it is not clearly defined under which terms the courts would decide that the investigation for the allegations against the shareholders should begin and how this investigation should affect a process for compulsory acquisition that is already in progress. The next important tool, of similar role would be the following one: the minority shareholder could use the ‘unfair prejudice mechanism’ (Davies 2010, p.251). The particular mechanism, which has been already mentioned above, focuses on the following fact; the minority shareholder can claim that the decisions of the firm’s majority shareholders are based on unfairness (Davies 2010). In this way, these decisions are opposed to the interest of the entire company (Davies 2010). In other words, the particular mechanism emphasizes on the practice of directors to focus on their own interest and ignore the interest of the company. This unfairness can be used for justifying a petition using the provision of s944 of CA 2006. This mechanism also can be characterized as quite effective for helping the minority shareholders to protect their interests. However, as the previous mechanism also, the specific one seems to set a significant challenge: how the minority shareholder can prove that the decisions of the majority shareholders are opposed to the interests of the company? Moreover, on which criteria the court would take such decision? It is noted that if the petition under the s944 is proved successful then civil proceedings can start against the directors who have acted against the interests of their company (Davies 2010). In regard to the above two mechanisms, available to minority shareholders for protecting their interests, Davies (2010) makes the following comments: a) these mechanisms seem to operate more effectively in regard ‘to small teams of shareholders’ (Davies 2010, p.253). It is doubted whether these mechanisms could be used for protecting the rights of minority shareholders in large corporations; from this point of view the actual value of these mechanisms is significantly reduced, b) it is noted that ‘minorities in public traded companies’ (Davies 2010, p.253) should use another mechanism: the exit right, which would be more effective, compared to the above two mechanisms. The exit rights, according to Davies, is described as follows: the exit right is incorporated in the Takeover Code; the particular right is preferred by the courts in cases of ‘unfair prejudice’ (Davies 2010,p.253); however, it is possible for the court to use this right even if there is no case of unfair prejudice, meaning that the terms of use of the particular mechanism is depended on the perceptions of the court in regard to the particular case. Conclusion The position of minority shareholders within corporations is protected through a series of appropriate provisions, as incorporated in the Companies Act 2006 and as presented above. In practice the courts seem to give to minority shareholders all necessary support so that the latter have a chance to dispose their shares at a reasonable price, i.e. a price that is aligned, as possible, with the actual price of the shares. In regard to the above fact, the following problems have been identified: a) the criteria used by the courts in order to identify whether an offer is reasonable are not standardized; this means that under certain circumstances an offer has been characterized as reasonable without meeting the relevant criterion, i.e. the criterion of the balance between price and amount paid to the minority shareholder; b) the terms of the negotiations between the minority shareholders and the majority shareholders are not clearly set in the provisions defining the criteria on which the compulsory acquisition of minority’s shares by the majority shareholder would be based. This means that the majority shareholder can claim that the price of the offer has been decided through fair negotiations without such case to exist. When such problems appear, the court need to set specific requirements in order to provide to the majority shareholder an order for compulsory acquisition of the minority shareholder’s shares. The literature published in this field seems to support the need for the review of the framework in which the compulsory acquisition of the minority shareholder’s shares will take place. In its current form, the particular framework leads to inequalities, resulting to the promotion of unfair negotiations. Even if the Company Act 2006 incorporates a series of provisions (s 979-981) for the protection of the interests of minority shareholders, the application of these provisions in practice is problematic promoting practices that it is believed to oppose. Bibliography Amao, O. (2011) Corporate Social Responsibility, Human Rights and the Law, Oxon: Taylor & Francis. Bernitz, U. and Ringe, W. (2010) Company Law and Economic Protectionism: New Challenges to European Integration, Oxford: Oxford University Press. Davies, P. (2010) Introduction to Company Law, Oxford: Oxford University Press. Frederikslust, R. and Ang, J. (2008) Corporate Governance and Corporate Finance: A European Perspective, Oxon: Taylor & Francis. Goo, S. (1994) Minority Shareholders' Protection, London: Routledge. Kraakman, R. (2009) The Anatomy of Corporate Law: A Comparative and Functional Approach, Oxford: Oxford University Press. Mallin, C. (2007) Corporate Governance, Oxford: Oxford University Press. Mitchell, V. (1994) “Gambotto and the Rights of Minority Shareholders,” Bond Law Review: Vol. 6: Iss. 2, Article 1, pp. 92-11. Office of Fair Trading (2010) Research report. OFT 1218, “Minority interests in competitors,” http://www.oft.gov.uk/shared_oft/economic_research/oft1218.pdf Sheikh, S. (2008) A Guide to the Companies ACT, Oxon: Taylor & Francis. Vries, P. (2010) Exit Rights of Minority Shareholders in a Private Limited Company, London: Kluwer. Case Law Grant v Switchback Railways Co (1888) 40 Ch D 135 O’Neill v Phillips (1999) 2 BCLC Re a Company (No 008699) [1986] BCLC 382 Re Westbourne Galleries Ltd. [1973] A.C. 360 WCP Limited v Gambotto & Anor (1993) 11 ACLC 457 (New South Wales Court of Appeal). Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Examine critically the rights of minority in a company when the notice Essay”, n.d.)
Retrieved from https://studentshare.org/law/1397687-examine-critically-the-rights-of-minority-in-a
(Examine Critically the Rights of Minority in a Company When the Notice Essay)
https://studentshare.org/law/1397687-examine-critically-the-rights-of-minority-in-a.
“Examine Critically the Rights of Minority in a Company When the Notice Essay”, n.d. https://studentshare.org/law/1397687-examine-critically-the-rights-of-minority-in-a.
  • Cited: 0 times

CHECK THESE SAMPLES OF Rights of Minority in Companies

Shareholders Rights and Powers

more than 50% of the total equity shares), it has been viewed that the interests of minority shareholders are being oppressed by several means.... Besides, the other fundamental rights of the minority shareholders include voting on a few selected corporate events which include liquidation of the business entity, mergers or sale of assets, calling special meetings of the stockholders, and scrutinizing the books, records as well as lists of the shareholders.... This assignment "Shareholders' Rights and Powers" presents an idea about the nature of the majority shareholders, it can be stated that the majority shareholders play a dominant role over the minority shareholders in respect to organizational decision making....
8 Pages (2000 words) Assignment

Human Rights and Oil Companies

This paper seeks to look at the effects of oil companies in Nigeria the environment.... A sequence of exploitive and fraudulent government in Nigeria have been endorsed and sustained by western administrations and oil companies, attentive on gaining from the fossils fuels that can be exploited.... As individuals and transitional oil companies have been dueling over this 'black gold' in the delta region, massive poverty and ecological devastation have amounted....
3 Pages (750 words) Essay

Business Succession Planning

In the case of proprietary companies(3), the ownership and management are overlapping and there is no distinction between the two.... The minority shareholders are those shareholders who are in a position to exercise control over the issues of the company.... This situation may lead to a conflict of interests between the majority and minority shareholders.... Also, the majority of shareholders can have control of financial resources and human resources of the company and this may create domination over the minority group....
6 Pages (1500 words) Research Paper

Minority Shareholders Proprietary Rights

The rights of the minority shareholders have always been sought for setting right the wrongs that might get done to them.... The proprietary rights of the shareholders have to be upheld but not at the cost of the company according to the British Law, in contrast to the Australian perception of the matter.... In cases related to owning land or building there had not been contentions on the proprietary rights of a person and what is offered to one person is same as the other one3....
8 Pages (2000 words) Essay

The Rights of Minority Members in Australia

n this essay, the various issues concerning the minority shareholder rights in Australia and the different ways by which the shareholder rights may be protected are discussed in detail.... In the fourth section, various issues regarding the minority shareholder rights are discussed.... In the fifth section, various remedies for protecting minority shareholder rights are discussed in detail.... In the third section, the directors and shareholders; rights and obligations are discussed....
27 Pages (6750 words) Essay

Taking Shareholder Rights Seriously

The rights of the shareholders, especially in the case of minority shareholders, should be viewed from the angle of the company in the backdrop of the statutory provisions with reference to the violation of their rights, and the institutions such as stock exchanges and Securities and Investments Commission in the country with regard to their operations in dealing with the issues.... minority shareholders who ran a business that competed with the company sought a declaration that the amendment was invalid....
20 Pages (5000 words) Research Paper

Directors Duties, Minority Protection of Shareholders

Moreover, prior to the CA 2006, the 1989 companies Act and the companies Act 1985 provisions pertaining to directors' duties provided positive obligations for directors to act in good faith and in the best interest of the company, to avoid conflicts of interest and not to profit from their office2.... From the paper "Directors' Duties, minority Protection of Shareholders" it is clear that procedural requirements combined with the courts' rights to refuse permission and award cost against a claimant arguably provide built-in protection mechanisms against floodgate claims triggered....
8 Pages (2000 words) Coursework

Shareholders Rights in Qatar

This scenario is not effective in Qatar especially with the case of minority shareholders.... "Shareholders Rights in Qatar" paper focuses mainly on the rights of shareholders in Qatar and the remedies of a shareholder.... ost of the companies started the business of issuing shares as a method of investment to a shareholder and as a way for the companies to make a profit.... The minority shareholders are denied the chance to actively participate in the voting process putting them in a position of being voiceless in the company affairs (Baydoun, #7)....
6 Pages (1500 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us