Shareholders only have rights but no liabilities.
What rights do shareholders have?
- right to vote
- right to attend AGM and EGM
- right to receive the Annual Accounts
- right to receive dividends when declared
Issue – Do some shareholders have more rights than stated above? Do the above always hold true for every single shareholder?
The simple answer – Some shareholders do have more rights, whether rightfully or otherwise, than the others.
The following are real examples where my simple answer holds true:-
- The issue of consolidating the accounts of 2 companies which are publicly listed. The holding company requires a lot more than statutory info to prepare its consolidated accounts and satisfy its auditors. So we have possible situation of a majority shareholder being given access to non-publicly available info.
- How about the situation of a major shareholder getting sensitive info through its nominee directors in the subsidiary company? A nominee director is appointed by a major shareholder. Who do that director owe a duty and responsibility to? The major shareholder or to the company?
How to resolve this?