What Statutory Remedies Does The Law Provide To Minority Shareholers Who Do Not Agree With The Way In Which The Company Is Being Run

Question 1

Explain the first statutory remedy available to minority shareholders who do not agree with the way the company is being run

Answer 1

Derivative actions, under section 260 of the companies act 2006, a minority shareholder can bring derivative action on behalf of the company if they believe that the company’s directors are acting in a way that is unlawful or unfairly prejudicial to the interests of the company. This allows minority shareholders to challenge the decisions of the majority shareholders and company directors and seek redress on behalf of the company.

Question 2

Explain the second statutory remedy available to minority shareholders

Answer 2

Unfair prejudice petitions, minority shareholders can also apply to the court for relief under section 994 of the companies act 2006 if they believe that the affairs of the company are being conducted in a way that is unfairly prejudicial to their interests. The court has wide powers to order remedies, including ordering the company to buy out the minority shareholders shares, ordering a change in the companies management or winding up the company altogether.

Question 3

Explain the third statutory remedy the law provides to minority shareholders

Answer 3

Statutory derivative claim, under section 261 of the companies act 2006, minority shareholders can bring a statutory derivative claim on behalf of the company if they believe that the company’s directors have breached their duty of care, skill, or diligence. This allows the minority shareholder to seek redress for any losses suffered by the company as a result of the directors actions.

Question 4

Explain the fourth statutory remedy the law provides to minority shareholders

Answer 4

Shareholder resolutions, minority shareholders also have the right to propose resolutions at general meetings of the company, which can be used to challenge the actions of the company’s directors or to propose changes to the way the company is being run. However, the success of such resolutions may depend on the support of other shareholders

Question 5

Provide a summary of the statutory remedies provided to minority shareholders who are not happy with the way the company is being run

Answer 5

The law provides a range of statutory remedies to minority shareholders who do not agree with the way the company is being run. These remedies are designed to ensure that the interests of all shareholders, including minority shareholders, are protected and that the company is run in a fair and lawful manner.