The Law of Majority Power de David Chivers QC

The Law of Majority Power: The Use and Abuse of Majority Shareholder Power

David Chivers QC

Ben Shaw

This new work book provides unique practical advice for majority shareholders on the exercise of their power. Majority shareholders frequently wish to know how they can expropriate shares from or limit the rights of minority shareholders without substantial risk of legal action. Such occasions include management buyouts. This work analyzes the risk that such actions may occur and suggests ways of minimizing them.

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Descriere

Majority shareholders often wish to act in ways that may disadvantage the minority. For example, it may be in the majority's interest to obtain complete control of a company by acquiring the minority's shares. Alternatively, the majority may want to increase their control without expropriating the minority's shares. The majority may wish, for example, to exclude the minority from participation in future rights issues. In these kinds of situations, however, there islikely to be considerable uncertainty as to the risks that the exercise of the majority's power will be open to challenge by the minority. By providing distinct practical advice this book will assist majority shareholders in exercising their power, to enable them to avoid successful challenges broughtby disgruntled minorities.This book considers, firstly, different ways in which majority shareholders may exercise their power to expropriate shares from minority shareholders. It then analyses each of these methods and suggests ways of reducing the risks that such actionsof these methods may be challenged by disaffected minorities. Methods of expropriation included in this section include: the introduction of expropriation provisions into a company's articles of association; schemes of arrangement under s 425; andcompulsory acquisition of shares under ss 428-430. Further, the authors consider ways in which majority shareholders may control minority shareholders without expropriating shares from them. Topics in this section include the majority's power to vary rights attached to the minority's shares and to exclude the minority from participation in rights issues. Finally, the book discusses a variety of other topical issues that are relevant to majority control, for example, the extent of the majority's power to ratify wrongs they have committed against the company and the majority's power to limit dissent at company meetings. This new work will provide an invaluable reference guide to anyone advising majority shareholders. It is the first of it kind to concentrate offering practical advice to majority shareholders on ways of minimising the risk that their actions are being challenged.