Shareholder Protection in Close Corporations

Shareholder Protection in Close Corporations
Title Shareholder Protection in Close Corporations PDF eBook
Author Alan K Koh
Publisher Cambridge University Press
Total Pages 427
Release 2022-09-29
Genre Law
ISBN 110875161X

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Close corporations, which are legal forms popular with small and medium enterprises, are crucial to every major economy's private sector. However, unlike their 'public' corporation counterparts, close corporation minority shareholders have limited exit options, and are structurally vulnerable in conflicts with majority or controlling shareholders. 'Withdrawal remedies'-legal mechanisms enabling aggrieved shareholders to exit companies with monetary claims-are potent minority shareholder protection mechanisms. This book critically examines the theory and operation of withdrawal remedies in four jurisdictions: the United States, the United Kingdom, Germany, and Japan. Developing and applying a theoretical and comparative framework to the analysis of these jurisdictions' withdrawal remedies, this book proposes a model withdrawal remedy that is potentially applicable to any jurisdiction. With its international, functional, and comparative analysis of withdrawal remedies, it challenges preconceptions about shareholder remedies and offers a methodology for comparative corporate law in both scholarship and practice.

Shareholder Protection in Close Corporations

Shareholder Protection in Close Corporations
Title Shareholder Protection in Close Corporations PDF eBook
Author Alan K Koh
Publisher Cambridge University Press
Total Pages 427
Release 2022-09-29
Genre Business & Economics
ISBN 1108496660

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Comparative study of withdrawal remedies in four jurisdictions to offer solutions to shareholder conflicts in small and medium enterprises.

Protecting Minority Shareholders in Close Corporations

Protecting Minority Shareholders in Close Corporations
Title Protecting Minority Shareholders in Close Corporations PDF eBook
Author Abdulrahman Nabil Alsaleh
Publisher
Total Pages 223
Release 2019
Genre Close corporations
ISBN

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Minority Shareholder Protection in SMEs

Minority Shareholder Protection in SMEs
Title Minority Shareholder Protection in SMEs PDF eBook
Author Jan Bertil Andersson
Publisher
Total Pages 0
Release 2010
Genre
ISBN

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SMEs or, as they are called here, 'close corporations', differ in many respects from publicly traded companies. Shares in publicly traded companies have a regulated market which shares in SMEs do not have. Since there is no regulated market for the shares there is usually a lock-in effect in the sense that, in the absence of contractual terms or rules in company law or in the articles of association, (minority) shareholders cannot sell their shares because of the lack of a market or at least they cannot sell them on 'fair terms'. Furthermore, I suggest that the historical theoretical assumption behind most of the rules in company law in general on protection of the minority is that minority shareholders should only have protection equivalent to their share of the voting rights and/or capital in the company. However, for efficiency reasons, I believe that most minority rules based on this assumption fail to achieve their purpose, namely the protection of the minority in close corporations. The reason for this is that any minority protection based on proportional protection will put the minority shareholders in a relatively weaker position than the proportional rights of those shareholders. To achieve the intended minority protection, I believe the following two conditions have to be met. First, where a particular transaction or event discriminates against a minority shareholder (or shareholders), protection for minority shareholders can only be achieved after the transaction or event, and only if the minority shareholders have access to information equal to or at least similar to a hypothetical perfect market situation (a perfect information position). Second, minority shareholders who do have access to information equal to or at least similar to a hypothetical perfect market situation will be in a bargaining position based on the same information. However, even with this information, minority shareholders will be at a bargaining disadvantage vis-à-vis majority shareholders. The reason is that the position of a minority shareholder in a close corporation, as reflected in the minority share of the voting rights and/or capital, is a bargaining disadvantage in itself. Only by strengthening the relatively weaker bargaining position of the minority shareholders after a discriminatory situation, but prior to negotiations between the minority shareholders and the majority shareholders to negate the discriminatory behaviour, will there be a solution that is proportional to the minority shareholders' share of the voting rights and/or capital in the company (as well as others interests of minority shareholders in a close corporation, to the extent these can be protected by law). Hence, the minority shareholders' weaker bargaining position has to be strengthened by minimum legal rules and a right to opt in to a higher level of protection in the articles of association.

Close Corporations

Close Corporations
Title Close Corporations PDF eBook
Author Russ Whitesel
Publisher Legislative Reference Bureau
Total Pages 48
Release 1982
Genre Close corporations
ISBN

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Minority Shareholders and Oppression in Close Corporations

Minority Shareholders and Oppression in Close Corporations
Title Minority Shareholders and Oppression in Close Corporations PDF eBook
Author Marcella Machado Carneiro
Publisher
Total Pages 100
Release 2002
Genre Close corporations
ISBN

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Convergence in Shareholder Law

Convergence in Shareholder Law
Title Convergence in Shareholder Law PDF eBook
Author Mathias M. Siems
Publisher Cambridge University Press
Total Pages 389
Release 2007-12-20
Genre Law
ISBN 1139468405

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On the one hand, it can be argued that the increasing economic and political interdependence of countries has led to the convergence of national legal systems. On the other hand, advocates of the counterhypothesis maintain that this development is both unrealistic and unnecessary. Mathias M. Siems examines the company law of the UK, the USA, Germany, France, Japan and China to see how this issue affects shareholder law. The author subsequently analyses economic and political factors which may or may not lead to convergence, and assesses the extent of this development. Convergence of Shareholder Law not only provides a thorough comparative legal analysis but also shows how company law interconnects with political forces and economic development and helps in evaluating whether harmonisation and shareholder protection should be enhanced.