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majority rule and minority protection in company law

For the purpose of this project, the protection afforded to minority shareholders will be critically evaluated and its effectiveness will be highlighted to portray the usefulness of the available remedies. Sometimes this dominant position leads to an oppression of the minority shareholders interest – this may be in the form of blocking minority shareholders from the decision making processes. Majority rule vs minority protection. Majority and minority define who has the power to rule. In fact, however, these principles are twin pillars holding up the very foundation of what we mean by democratic government. company law minority protection doctrines to strata title. Although, majority shareholders will habitually get what they want due to “majority rule”, it is essential that minority shareholders are given an audience prior to any major decision relating to the company. Companies Law – Majority Rule and Minority Rights. Majority Rule, Minority Rights On the surface, the principles of majority rule and the protection of individual and minority rights would seem contradictory. The majority of these remedies are firmly rooted in the common law but recently, these rules have been codified under the Companies Act 2006. The rule is, to some extent, justifiable. Most sovereign nations have imbibed democratic principles in electing the leaders of their various nations. The structure of democracy is as such, where the majority has the supremacy. This chapter examines the various ways in which the law has tried and sometimes failed to protect minority shareholders. This document is highly rated by B Com students and has been viewed 15517 times. This goes back to the foundational legislation on English company law in the nineteenth century and case law … ‘Majority rule’, is an established principle of company law whereby the majority of the shareholders hold the decision making power of the company. The rationale for minority protection is In Companies Act, 1956, the protection for the minority shareholders from oppression and mismanagement have been provided under section 397 (An Application to be made to company law board for relief in cases of oppression) and 398 (An Application to be made to company law board for relief in cases of oppression). In the corporate world, also the rule and decisions of the majority seem to be fair and justifiable. And as the popular notion of democracy being the government of the people by the people and for the people. The sparse current academic work ... 4 Rationales for Minority Protection Majority rule is an efficient governance mechanism but formulaic application of majority rule will inevitably cause injustice in some situations. it has thus become a global affair The discussions cover majority rule and minority remedies; the exceptions to the Foss v Harbottle rule ; statutory derivative claims; indemnity for costs; and shareholder remedies. The rule is, to some extent, justifiable. Nov 14, 2020 - Majority Rule but Minority Protection - Majority Rule & Minority Rights, Company Law B Com Notes | EduRev is made by best teachers of B Com. These are the diametrically opposed fundamental underpinnings of corporate law that have shaped and continue to shape our corporate law environment, creating a finely balanced situation where the majority could be said to rule, but only to a limited extent. 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