Corporate Law Assignment Example | Topics and Well Written Essays - 2000 words

Corporate Law - Assignment Example The rights include voting during the election of the directors, amending corporate bylaws as well as articles of incorporation and participating in annual meetings associated with the stockholders. Besides, the other fundamental rights of the minority shareholders include voting on a few selected corporate events which include liquidation of the business entity, mergers or sale of assets, calling special meetings of the stockholders and scrutinizing the books, records as well as the lists of the shareholders. It is in this context that with the majority shareholders holding a strong position in a company, in frequent instances, disagreements between the majority and the minority shareholders have been identified in the modern business context. The disagreements have been mostly regarding the exclusion of the minority shareholders from management participation, disproportionate allocation of shares and withholding of dividends with profits among others (1). In this discussion, a detai led analysis of the problems concerned with the rights held by minority shareholders, playing vital role causing potential disagreements amid the members of both majority as well as minority shareholders, will be taken into concern. Moreover, the different statutory remedies which are available to the minority shareholders in order to deal with situations where the majority shareholders misuse their power or breach their duties will also be portrayed in the discussion. A Brief Analysis of the Scenario The minority shareholders are often acknowledged as institutional investors among different business entities who play a limited function in influencing the background of corporate governance construction. This is majorly due to the fact that the presence of the majority shareholders within a business firm owing the rights to partially control its decision making process often facilitates significant sources of conflicts affecting the interests of the minority shareholders (2). However , it is worth mentioning in this regard that the minority shareholders posses certain rights which may be accessible in accordance to any ‘state close corporation laws’. These rights generally include amending corporate by-laws, voting during the election of the directors and organizing as well as managing annual meetings related with the shareholders among others as mentioned in the articles of association and memorandum. Despite, it has often been observed that the minority shareholders or the institutional investors find it to be quite challenging to exercise the aforementioned rights in a smooth way witnessing minimum disruptions. This is simply because the majority shareholders tend to dominantly control the business operations as they bear large proportion or percentage of shares along with various decision making rights concerning the corporate governance structure of the particular entity. As the majority shareholders possess maximum quantity of shares (i.e. mor e than 50% of the total equity shares), it has been viewed that the interests of minority shareholders are being oppressed by several means. In this similar context, the different ways which contribute towards the oppression of the minority s