What is the Option Available for the Shareholder to Fight Back?

Shareholder is an individual or legal entity who bought a share of the company at the time of its establishment or on the securities market or received it in another way in accordance with the law, for example, by inheritance, donation, by court decision, etc.

Shares provide shareholders their owners with a certain amount of rights, which may be different depending on which share was acquired by this or that person who became a shareholder. The unconditional rule, legalized by the current regulatory documents, is the following: each share of a given joint-stock company of one category and one type provides the shareholder its owner with the same scope of rights. These information are available with the derivative action attorney now.

However, the aggregate list of rights vested in shareholders is large and varied and can be classified according to a number of characteristics:

  • By the type of regulatory document in which the corresponding rights are established;
  • By the degree of protection of rights;
  • Depending on the nature of the emergence of rights;
  • By the nature of the rights themselves.

Shareholder rights depending on the type of regulatory document

Depending on which regulatory document of the Russian Federation contains the rights of shareholders, there are:

  • Shareholders' rights set forth in the Securities Market Law;
  • The rights of shareholders determined by the Law on Joint Stock Companies and the Law on the Privatization of State and Municipal Enterprises;
  • The rights of shareholders established by the charter of the company.

In accordance with the Law on Joint Stock Companies, the rights of shareholders, in addition to those set forth in the Law on the Securities Market, include:

Specifying the previously listed rights of shareholders and describe the features of the application of these rights depending on the category of shares and the type of joint stock company, the shares of which belong to the shareholder; The right to receive information about the activities of the joint stock company;

Shareholders' rights arising under certain conditions, namely:

  • When they accumulate a certain block of shares;
  • Related to the issue or acquisition by the company of its placed shares;
  • When making decisions at the general meeting on the reorganization of the company, on the conclusion of a major transaction or on amendments and additions to the charter of the joint-stock company.

The charter of a joint stock company may contain some of the rights of shareholders that are allowed by law, but are not fixed by law as mandatory. Thus, the charter of a joint-stock company further specifies the rights of shareholders, but not all, but only a specific joint-stock company.

Shareholder rights depending on the degree of their protection

In the legal literature relating to joint stock companies, there is a division of the rights of shareholders, depending on the degree of their protection by law, into: inalienable and inalienable rights. Inalienable rights are rights that a shareholder cannot be deprived of at the initiative of the joint-stock company itself, since they are given to him by law. The inalienability of rights recognized as such by law cannot be destroyed by the charter of a joint-stock company or by the decision of any of its governing bodies. The charter of a joint-stock company can expand the rights of a shareholder beyond the limits granted to him by law, but cannot reduce or curtail them. Accordingly, inalienable rights are rights that the owner of this share may or may not have.

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