A corporation is a legal entity created under a governing law. It may hold property and operate a business. The shares issued by this corporation are ownership titles and are issued to those having participated in its capitalization through investments. The owners of these shares are the shareholders.
This form of investment offers numerous advantages to shareholders. It allows them to manage the risks related to operating a business. It also gives them many options for financing the business and managing their income.
In choosing to invest in a corporation, shareholders wish to benefit from the forms of protection the law has to offer. To do so, they must comply with various formalities. Failing to observe these formalities may result in significant costs for the shareholders.
In addition, the shareholders must be able to count on the work of the board of the corporation in which they hold shares. In certain cases, the shareholders must be able to replace the board member if they do not fulfill their obligations towards the business.
The shareholders may also find themselves in conflict with one another. Knowing this, they may want to implement agreements to limit the sources of conflict and be able to manage those that may arise.
Lastly, minority shareholders may come to be at odds with a majority shareholder, especially if they feel that the latter is using its majority position to unfairly advantage itself. Fortunately there are way to address such situations.
Minority shareholders may exercise a variety of legal recourses to protect themselves against a conduct that is oppressive or unfairly prejudicial to their rights. Conversely, majority shareholders or directors facing such allegations should make sure they understand the scope of their powers as well as any limitation to these imposed by law.
In small or medium-sized enterprises, shareholders may sometimes be refused access to financial information, even though these shareholders also hold the position of directors of the corporation. This and other clues may indicate that their co-shareholders are defrauding the corporation. Fortunately, there are many legal recourses available to address theses situations.
Any shareholder who wishes to enter a shareholders’ agreement should seek legal advice to understand the many ramifications of such agreements. Likewise, legal guidance is key to implementing shareholders’ agreements or to invoke the remedies that they provide.
Situations may arise where shareholders are held personally responsible for the debts and obligations of the corporation. In such instances, it is said that the corporate veil has been lifted. It is therefore important to know when shareholders are at risk of being sued personally and how to contest any such lawsuits successfully.
Force-Legal corporate lawyers are fully familiar with the problems shareholders may face. They can guide you on how to benefit from the full protection offered by corporate laws.
Force-Legal corporate lawyers can draft shareholder agreements to protect you. With their knowledge of your business corporation’s articles and regulations and of the relevant legislative provisions, they can see to it that no decision is made in contravention of your rights. If you are facing an oppressive situation caused by a majority shareholder, our corporate lawyers can set in motion the appropriate legal remedies.
Our team of lawyers specializing in shareholder protection can provide valuable advice, as well as legal services, such as:
Whatever your activity sector, one of our corporate lawyers can meet all your corporate law needs. Contact us today !