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Shareholder Disputes

Shareholder disputes: court-ordered investigations

Minority shareholders sometimes grow frustrated with the direction the majority are taking the company, and with their inability to effectively oppose such direction. Frequently the frustration relates to a lack of transparency: the minority feel on the outside, looking in, with regard to the affairs of the company.

Shareholder rights

Beyond the entitlements set out in shareholder agreements and corporate bylaws, shareholders have certain rights spelled out in the Business Corporations Act of British Columbia (BCA). Under the BCA, shareholders have the right to vote at an annual general meeting on: resolutions governing the activities of the company; the election of members to the board of directors; and, whether to have the company's financial statements audited.

Shareholder dispute resolution

Most businesses are carried on through incorporated companies, and when those companies have more than one shareholder, the relationship between the shareholders can go through difficulties. Disagreements about the direction of the business, or external challenges faced by the business, can give rise to shareholder disputes that can threaten the company's business and even its existence.

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