Oppression and Mismanagement in an Organization
Introduction
The management of a Company is based on the majority rule, but at the same time the interests of the minority can’t be completely overlooked. While talking of majority and minority, we are not talking of numerical majority or minority but of majority or minority voting strength. The reason for this distinction is that a small group of shareholders may hold the majority shareholding whereas the majority of shareholders may, among them, hold a very small percentage of share capital. Once they acquire control, the majority can, for all practical purposes, do whatever they want with the Company with practically no control or supervision, because even if they are questioned on their acts in the general meeting, they always come out winners because of their greater voting strength. So, the modern Companies Acts contain a large number of provisions for the protection of the interests of minorities in companies.
Shareholders are part of a company. A “Shareholder” denotes a person who holds or owns the shares. In most of the cases, shareholders are also the members of the company. Usually an unlimited company or a company limited by guarantee has no shareholders. But the limited company has its own shareholders. The Memorandum of Agreement is enabling the opportunity to be the shareholders of a company.
A limited company has two types of Shareholders.
Majority Shareholder
Minority Shareholder
Majority Share holders: A single shareholders who owns & controls more than half of a corporation’s outstanding shares, or sometimes, a small group of shareholders who own & collectively control more than half of a company’s outstanding shares.
Or we can say, when a person or company has owns the majority of the shares (50 %++) in a limited company, has the outright control of the company’s operations, especially the election of its board of directors. Usually they are the founder of the company.
The majority shareholder is most commonly the
The management of a Company is based on the majority rule, but at the same time the interests of the minority can’t be completely overlooked. While talking of majority and minority, we are not talking of numerical majority or minority but of majority or minority voting strength. The reason for this distinction is that a small group of shareholders may hold the majority shareholding whereas the majority of shareholders may, among them, hold a very small percentage of share capital. Once they acquire control, the majority can, for all practical purposes, do whatever they want with the Company with practically no control or supervision, because even if they are questioned on their acts in the general meeting, they always come out winners because of their greater voting strength. So, the modern Companies Acts contain a large number of provisions for the protection of the interests of minorities in companies.
Shareholders are part of a company. A “Shareholder” denotes a person who holds or owns the shares. In most of the cases, shareholders are also the members of the company. Usually an unlimited company or a company limited by guarantee has no shareholders. But the limited company has its own shareholders. The Memorandum of Agreement is enabling the opportunity to be the shareholders of a company.
A limited company has two types of Shareholders.
Majority Shareholder
Minority Shareholder
Majority Share holders: A single shareholders who owns & controls more than half of a corporation’s outstanding shares, or sometimes, a small group of shareholders who own & collectively control more than half of a company’s outstanding shares.
Or we can say, when a person or company has owns the majority of the shares (50 %++) in a limited company, has the outright control of the company’s operations, especially the election of its board of directors. Usually they are the founder of the company.
The majority shareholder is most commonly the