#shareholder #oppression #litigation
I just read in the ABAJournal article that Delaware passed a law favorable to shareholders in litigation.
“A law banning corporate bylaws that impose a hefty price on investors who file unsuccessful shareholder derivative suits has been signed by Delaware’s governor.”
The Delaware legislature apparently recognizes the challenges that minority shareholders can face in closely held businesses.
In my practice, one fundamental challenge that I have seen is this:
In a closely held company it is very easy for one group of owner[s] to freeze out another owner.
I guess the first question is, “freeze out from what*?”
Control – Decision-making
Disclosures of Company Business
Profits in the Company
Employment in the Company.
What should a business owner/operator do to protect himself/herself?
Well, you have two readily apparent choices – address the issue before the business is formed, or address it once the problem arises.
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