Question

b) What powers do shareholders have in relation to the way that a company is managed on a day-to-day basis?

Answer 1

The day to day transactions of the company is managed by the directors of the company, shareholders of the company does not have the power to manage day to day business in the company however they have the right to appoint the directors of the company. Shareholders of the company have some more powers including appointment of director which are classified as below:

Shareholders' power can include special power, including:

· Power relating to the appointment of directors.

· Power relating to Removal of director

· A right to be consulted or informed before the company takes a particular action.

· Weighted voting power.

Directors clearly are the ultimate managers of the business. Shareholder voice is limited to a few instances explicitly authorized by statute. The power of shareholders can be limited, modified or waived. However, shareholders cannot be financially liable for more than the amount unpaid on their shares. Shareholders can agree with the company and/or between themselves that their power are restricted.

However Under the traditional view, respect for the fundamental rights of the shareholder is a given. If shareholders are the owners of the corporation, then of course they are entitled to strong economic and control rights. After all, owners generally are allowed to do as they please with their property, and the corporation should be no exception.