Even though you only own a minority stake, your position as a shareholder matters a lot to you. Unfortunately, the majority of owners might not agree with your viewpoint and might not want you engaged in company issues. The majority shareholders just like to do things their way, but you should have a role, too. This is a dictatorship against shareholders. You will learn more about your rights under the law as a minority stakeholder after reading this article. To know more about your right in shareholder oppression, contact a business attorney Tampa.
What are your rights in shareholder oppression?
Any person or organization that maintains at least one share of stock or mutual fund in a corporation is regarded as a shareholder. Since they successfully manage the business, shareholders have specific rights, obligations, and advantages in times of prosperity. A stakeholder in a profitable business, for example, might receive dividend payments.
Each shareholder in a business has abilities and rights. In general, they consist of the following:
- The power to vote to remove directors,
- the right to attend a shareholders’ meeting, and
- the ability to use certain auditing rights
Minority shareholders can have fewer rights because their ability is determined on the amount of shares they own. As a result, most shareholders have the opportunity to abuse their power, harming the minority. This is referred to as minority shareholder oppression.
For example, the company’s strong owners may develop greed and make decisions that solely benefit them, which often hurts the whole company or its minority owners. Because they are exempt from penalty by their majority status, majority shareholders may take unwarranted risks.
A Fiduciary Duty of Loyalty
Directors and officers must act in the corporation’s and all of the shareholders’ best interests. They should not violate the freedoms of minority shareholders. This implies that they might not benefit at the expense of or in opposition to minority owners’ rights.
The language of the statute states that officers and directors must act to further the best interests of all shareholders and the company as a whole.
In reality, though, the company’s decisions frequently get decided by the majority of its shareholders. Minority owners are not slated to be involved much in day-to-day business operations as they have the power to nominate or remove officers.
What Are The Rights of Minority Shareholders?
The investment and goals of a minority shareholder are at the grasp of the majority shareholders in their lack of legal protection. Minority shareholders’ interests are protected by law, as are the interests of all shareholders.
CRIMINAL MATTERS 