Question

In: Accounting

12. one of the difficulties of being a minority shareholders in a company is that the...

12. one of the difficulties of being a minority shareholders in a company is that the majority rule. identify and briefly discuss at least four ways in which the Corporation act allows the minority members to protect themselves and the company and enforce their legal rights
Explain base on Austrailan tax law and in your own words please.

Solutions

Expert Solution

A proper balance of the rights of majority and minority shareholders is essential for the smooth functioning of the company. Minority shareholders have limited rights to benefit from the operations of a company, including receiving dividends and being able to sell the company's stock for profit. In practice, these rights can be restricted by a company's officers' decision to not pay dividends or purchase shares from shareholders.

Any shareholder in a corporation, whether public or private, has certain important rights pertaining to the corporation. Examples of shareholder rights include the right to vote at annual shareholder meetings, to review information about the company, including the company books and records and a list of all shareholders, and to vote on major corporate events such as selecting directors, approving mergers, dissolution, major asset sales, and amendments to the corporate charter documents.In private corporations, minority shareholders need additional protections against attempts to improperly exploit the situation. The extent of these additional rights afforded by state law varies from state to state. Nearly all states recognize certain minority shareholder rights. In addition, it may be possible to have your attorney negotiate certain shareholder rights and remedies specific to your situation and even have them incorporated into a shareholder agreement.


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