Question

What types of remedies are available to shareholders of a company? Explain (1000 words)

Answer 1

Court Ordered Meetings

The corporate statutes grant the court with the right to call for shareholder meetings under circumstances where meetings have been impeded due to lack of discipline or restraint by either one or two groups of shareholders. The court reserves the rights to call for, or conduct meetings in a way the court deems appropriate.

Derivative Action

The powerful remedy of ‘derivative action’ is an infrequently used remedy which allows the shareholder or any other complainant to unilaterally advance an action. This action is advanced in the name of the company in cases where the company itself refuses to bring about the action. While this is a shareholder remedy, the purpose of the action of itself is to correct the wrongs caused to the corporation by its other constituents.

Oppression Remedy

This is arguably the most lethal weapon in the possession of the minority shareholder. The remedy exists primarily to defend the right of the minority shareholders in a corporation that runs at the discretion or convenience of the majority. The remedy is particularly useful considering its flexibility and inclusiveness which aids a broad category of individuals.