Common shareholders are granted six rights: voting power, ownership, the right to transfer ownership, dividends, the right to inspect corporate documents, and the right to sue for wrongful acts.
The shareholders of the company have the right to inspect the register and books of the company which depicts the financial status of the company. The shareholders can also inspect and examine other documents of the company and also have the right to raise questions about the same.
A shareholder or group of shareholders representing at least 5% of voting rights can request the directors of the company to call a general meeting (section 303, Companies Act 2006). A shareholder cannot ask a court or government body to call or intervene in a general meeting.
Variation of rights. The rights of shareholders can be varied by amending the articles. Any amendments to the company’s articles must be done by special resolution.
Rights of shareholders possessing at least 10% of shares
Right to demand a poll – in general, members holding 10% of voting shares (or five members who have the right to vote) can demand a poll in respect of a proposed resolution (s. 321).
Can the shareholders overrule the board of directors? … Shareholders can take legal action if they feel the directors are acting improperly. Minority shareholders can take legal action if they feel their rights are being unfairly prejudiced.
Under company law, certain decisions can only be made by shareholders who hold over 50% of the shares. Shareholders with 51% of the equity have the power to appoint and remove directors (and thus change day to day control) and to approve payment of a final dividend.
In a rights issue existing shareholders are given the opportunity to buy a set number of new shares in the company they own. These new shares are often available at a discount to the existing share price, to encourage investors to take part.
Shareholders v Directors – who wins?
- to attend and vote at general meetings of the company;
- to receive dividends if declared;
- to circulate a written resolution and any supporting statements;
- to require a general meeting of the shareholders be held; and.
- to receive the statutory accounts of the company.
One of your key rights as a shareholder is the right to vote your shares in corporate elections. Shareholder voting rights give you the power to elect directors at annual or special meetings and make your views known to company management and directors on significant issues that may affect the value of your shares.
It is important to note that shareholders cannot sue a corporation simply whenever they have a disagreement. … If a shareholder does decide to take legal action against a corporation, they can only do so in one of two ways: either through a direct lawsuit or an indirect derivative lawsuit.
The main documents of interest to shareholders will be the company’s annual report and accounts. … However, it’s worth noting that shareholders have no right to receive most other documents – so, for example, they cannot usually demand to see copies of the management accounts prepared for the directors.
Common shareholders possess the right to share in the company’s profitability and gains from its stock price appreciation. Shareholders may also share in a company’s profits by receiving cash or stock payments from the company—called dividends.
Shareholders are entitled to inspect the company’s financial books and records, including, but not limited to, financial statements, shareholder lists, corporate stock ledgers, and meeting minutes. …
Companies are owned by their shareholders but are run by their directors. … However, shareholders do have some power over the directors although, to exercise this power, shareholders with more that 50% of the voting powers must vote in favour of taking such action at a general meeting.