Minority Shareholder Oppression Lawyers
The rights of shareholders vary depending on the size and structure of the company. In large corporations, for example, shareholders are allowed to buy, sell, or trade their investments from one business to another on the free market. In smaller businesses, however, shareholders attend meetings, participate in business decisions, and may not withdraw their investment at-will.
What Is Minority Shareholder Oppression?
In smaller businesses, shareholders play an important role in business decisions. At annual meetings members interact with management and exercise their individual rights; however, when the members are split on a certain proposal or strategy, the majority group wins.
If this division remains consistent, members of the minority group may suffer from retaliation by majority group members or directors. When this occurs, it is called “minority shareholder oppression.” Minority members may be denied information and economic gains, effectively forcing them to sell their stock, generally at a very low price.
When a company’s directors or majority group violates other shareholders’ rights, such as preventing them from receiving financial gains, the oppressed may be eligible to file a lawsuit. All shareholders have the right to be treated with good faith and honesty by their fellow members. When this right is not respected, the oppressed may have grounds for a lawsuit.
To learn more about the rights of shareholders or to file a legal claim for shareholder oppression, contact the minority shareholder oppression lawyers of the Burk Law Firm, P.C. by calling 512-306-9828 today.