Question

Business law

(1) Can a small-holding (minor) shareholder have an influence on how a company is managed? What are the main restrictions and are the number of shares held relevant?

Answer 1

1) No, A small holding shareholder cannot have influence on how a company is managed. He does not exert any control over the company. As they doesn't own much of the holdings in the company they cannot take decisions regarding the company which influences it. Therefore a small holding shareholder have no influence on the company and it's activities. Only the majority shareholders can influence the company .

Main restrictions are as follows:

• There's no shareholders' perspective of the board in making the decisions and minority shareholders' interested are not restricted.
• The Corporate governance restricts the minority shareholders.
• The voting rights are even restricted for minority shareholders.
• No much importance to the concerns of the shareholders.
• Restriction of communication and interaction between minority shareholders, Board members and management.

The number of shares held with the minority shareholders are relevant even though they hold small number of shares in the company.