right and protection of interest of the minority shareholders

6159 Words25 Pages
Abstract

This paper examines "Rights and Protection of the Interest of the Minority Shareholders" I will discuss the recent development, issues and legal practices in the subject in Bangladesh perspective as well as international. Rights of Minority Shareholder and protection of their rights is now talked topics as new problems are emerging regarding the issues. A few initiatives have taken by national level and problems are gradually increasing, therefore some recommendation has been prescribed in the paper.

1.Introduction:
There are various problems founds in Bangladesh in order to enforcing the rights and interests of minority shareholders. Minority shareholder are oppressed and
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Minority shareholders should address this issue by exercising their freedom to contractually secure greater rights than the corporate statute explicitly allows. In some states, “close corporation” statutes allow minority shareholders greater flexibility to preserve minority shareholder rights through contracts such as Buy sell and Shareholder Agreements.4

i. Rights Under The Memorandum And Articles Of Association.
The Memorandum and Articles of Association (“M&A”) of a company are the constitutional documents of a company. The M&A are important documents as they set out and regulate among other things the objects of the company and the manner in which the company to be managed.
The M&A take effect in law as a contract between not only the shareholders and the company, but between each individual shareholder and every other. Generally, an affected individual shareholder may bring an action in court to prevent any proposed breach of the M&A. In appropriate cases, the court may also set aside acts done in breach of the M&A. However, where a third party is involved, the courts may be less prepared to set aside the transaction unless the third party knows or possibly ought to have known of the breach.

To further entrench rights under the M&A, the law provides that the M&A can only be amended by a special resolution, that is to say a resolution passed

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