By definition, minority shareholders own less than 50% of the company’s outstanding shares. The majority is Goliath to the minority’s David. 2. Section 216 of the Companies Act provides for the protection of the minority shareholder’s right to be treated fairly against majority abuse. PRELIMINARY. 2.2 To reflect the interest of the “Minority”, a 10% criteria in case of companies having share capital and a 20% criteria in the case of other companies is provided for in the existing Act. Short title and commencement. On close reading of Section 245 of the Companies Act, 2013, it can be seen that the intent of the section is not only to empower the minority shareholder and/or members of the company but also the depositors. Many provisions in companies act, 1956 deals with situations where minority shareholders are affected and the same can be divided into various major heads:- A. OPPRESSION AND MISMANAGEMENT OF THE COMPANY . It’s normal for a single majority shareholder to exist in a limited company who happens to be the company director. 23 February 2016 . Minority Shareholder Rights . ACT 777 . What remedies are available to me? Oppression is a means of exercising authority or power in a burdensome, cruel or unjust manner. 1. The Act came into effect on 29 December 1967, and was last reviewed in 2005. When the minority shareholder has decided to exit the company, the minority shareholder will need to dispose of the shares held. One of the amendments introduced by this Order was that special notice was required for a … However in a PLC there may be literally hundreds of shareholders all in the minority. Frank Thianer . Minority shareholders can pool their shares together and vote collectively as a unit to strengthen their voting position. 11 Companies Act 46 of 1926 (hereinafter ‘the 1926 Act’). An Act to provide for the registration, administration and dissolution of companies and corporations and to provide for related matters. The statutory rights of minority shareholders in Irish companies are set out in detail in the Companies Act 2014 (“the 2014 Act”). Understanding Your Rights As A Minority Shareholder . While the law provides minority shareholders with remedies against oppression under the Companies Act, several legal requirements must be met for relief to be granted. In Companies Act, 1956 with respect to minority shareholder right for reconstruction and amalgamation of companies, under section 395 states that for the transfer of shares or any class of shares of a company to another company, consent of the holders of at least (9/10) i.e. Minority shareholders have certain statutory rights under the Companies Act 2006 and these should be one of the first ports of call in the event of a shareholders dispute. IBA Corporate and M&A Law Committee 2016 . They cannot be reduced to the detriment of any shareholder. I hold 20% shares in a private company that I bought into a few years ago. The Companies Act (Amendment) (No 2) Order, 2017 was introduced on 6 May 2017 to improve the ease of doing business in Brunei by strengthening the rights of minority shareholders. The variation of the standard percentages set out in Section 64 and Sections 65(8) and 65(9) of the Companies Act. Statutory rights are those that are enshrined by law (predominantly the Companies Act 2006). 12 Aspek Pipe supra note 6 at 526. However where the memorandum and articles of association confer rights upon the shareholders, these rights are enforceable by the shareholders directly as explained in section 3 below. In this blog post, Aranya Saha, a student of Jogesh Chanda Chaudri Law College, Calcutta University, who is currently pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, analyses the provisions for the protection of the rights of minority shareholders present in the Companies Act, 2013 Introduction The Indian Companies Act, 2013 defines the […] Rights of a shareholder, governed either by the Companies Act or by the Memorandum of Association or by the Indian Contract Act. This article will provide an overview of the CA 2016. The majority shareholders heavily influence the directors who take decisions which in my view is not always in the best interests of the company or my own as a minority shareholder in the company. VDB Loi will present aspects of the upcoming law in a series of notes. (1) This Act may be cited as the Companies Act 2016. A shareholder cannot ask a court or government body to call or intervene in a general meeting. 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