I have only got a small one - what can I do?
Whilst the title to this post risks yet more strange comments clogging up my spam filter there is a serious point to be made. Many people are unaware of the rights that they have as a small shareholder in a company. These rights are hidden away in the Companies Act 2006. Sometimes these rights can give minority shareholders leverage in the company they did not know they had.
For example, all shareholders have a right to receive a copy of the company’s annual accounts or reports (s.423 Companies Act 2006) and to be supplied with copies of the company’s constitutional documents (s.32 Companies Act 2006). They also have pre-emption rights on the allotment of shares (s.561 Companies Act 2006).
Shareholders with 5% or more have the right to require the company to circulate a written resolution (s.292 Companies Act 2006).
Shareholders with 10% or more have the right to have the company’s annual accounts audited (s.476 Companies Act 2006).
If you hold more than 25% then you can block a special resolution and therefore prevent amendment of the company’s articles.
Some of these rights can be modified by the articles of the company but many cannot. They can be a useful tool for minority shareholders and can sometimes provide just enough leverage to get somebody to the negotiating table to resolve a dispute.
Please follow this link for a list of shareholders rights under the Companies Act 2006.
Tags: minority shareholder, shareholder rights
shareholders rights | Ed Weeks | 
February 15, 2012 5:29 pm
Subscribe