MAJORITY SHAREHOLDERS POWER AND MINORITY SHARHOLDER’S RIGHT: AN ANALYSIS

AUTHOR – ANURAG SINGH, STUDENT AT SCHOOL OF LAW, GD GOENKA UNIVERSITY, GURUGRAM, HARYANA

BEST CITATION – ANURAG SINGH, MAJORITY SHAREHOLDERS POWER AND MINORITY SHARHOLDER’S RIGHT: AN ANALYSIS, ILE LEX SPECULUM (ILE LS), 1 (1) OF 2023, PG. 87-104, APIS – 3920 – 0036 | ISBN – 978-81-964391-3-2.

ABSTRACT

IN THE DAY-TO-DAY OPERATIONS OF A CORPORATION, DECISIONS impacting the administration of the business must be made, and these decisions are often decided by the majority of members. The interests of the majority stakeholders may sometimes conflict with those of the minority stockholders throughout this decision-making process. If the decisions taken in such a situation only serve the interests of one group and not the organization’s overall larger interests, the minority members whose rights may have been violated may protest the action. How to protect minority stakeholders within the framework of commercial activity is one of the most difficult topics in modern company law. The objective would be to strike a balance between the company’s actual control and the minuscule individual shareholders’ interests. Palmer accurately said that, in terms of shareholder rights, “a proper equilibrium of the privileges of majority and minority shareholders is quintessential for the smooth functioning of the company.” It is reasonable to anticipate that any choices made in a company’s affairs would be made with the ideals of natural justice and fair play in mind. Minority shareholders’ interests must be safeguarded in the event that this is not done. This study attempts to analyze the acts of majority shareholders which in turn resulting to oppression and mismanagement towards minority. Additionally, this study also examines the exception given in Landmark ruling of English court in Foss vs. Horbottle,1934. This study concludes with resorting solutions for minority shareholders against the oppressive acts of major stakeholders in the corporate set up.

Keywords: Majority, minority, oppression, mismanagement, company, balance, etc