April 09, 2021

Minority Shareholders: What are their rights in a Dispute?

Legal disputes between minority and majority shareholders can threaten the stability of a business. Often, minority shareholders are on the losing end of a power differential. In these cases, legal representation can help close the gap. The Brockmeier Law Group can assign an Irvine CA Business Litigation Attorney to review your case if you believe you are being treated unfairly.

The Rights of Minority Shareholders

Minority shareholders may have weaker standing, but they have certain common rights which must be respected. An Irvine Business Attorney will know what your rights are after reviewing your contract. They include:

• Preemptive buying rights: The right to buy newly issued shares
• Dividends: Profit portions owed to shareholders
• Board member vote: The right to have their votes counted when selecting new board members
• The right to sue for wrongdoing: Any shareholder can take legal action after having been wronged by the board of directors

How to Protect Those Rights

While it may be human nature to devalue those who hold lesser shares, it is still unacceptable and likely illegal to ignore, infringe, or otherwise violate their rights. Often, the first step is to recognize a violation of rights when it arises. Examples include:

• A failure to pay dividends due
• Making a shareholder sell his shares by force or coercion
• Withholding relevant business information
• Breaching or neglecting fiduciary duty
• Illegal or fraudulent action or behavior

As a minority shareholder, you may have contractual agreements which place you at a disadvantage. You may not be fully informed of all of your rights, you may be left out of opportunities, or have information withheld from you. There are common minority shareholder’s rights which are the same from state to state. There are also such rights that may be excluded from or unique to the state you live in.

How an Irvine Business Litigation Attorney Can Help

An attorney who specializes in the rights of shareholders can help you to know what rights you have, which rights may have been violated, and help you to pursue legal action. A skilled litigator can advise you throughout the process, and protect your rights.

If you believe your rights as a minority shareholder are being violated, the legal professionals at Brockmeier Law Group can help. An Irvine CA Business Attorney will review your case, study your contract, and take action.

Let the experienced attorneys at Brockmeier Law Group help with all your legal needs. We provide services to clients in Irvine, Los Angeles, San Bernardo, San Diego, Orange County, and throughout all of Southern California. Contact us today.

Give Brockmeier Law Group a call at 310-425-3431.