LAW ON MINORITY SHAREHOLDERS

Law on Minority Shareholders



Law on Minority Shareholders

1: Introduction

The main purpose of this paper is to discuss on the issue that the minority shareholders in search of remedies for justifiable grievances, are still too often denied justice because of procedural hurdles or judicial inflexibility. Minority shareholders have more influence in corporate governance. Indeed, they have control mechanisms that grant them the right companies, in order to protect the social interest. It is important to appreciate this new legal reality: to what extent the minority can they influence the management of the company? This term is a Latin phrase composed of two words, ultra vires and, which mean beyond (ultra), and strength, competence or authority (vires), respectively. By joining these two words, we get the Latin phrase which means ultra vires beyond their strength, their competence or their autoridad1. In the legal world has used this Latin phrase to refer to acts of public or private entities that exceed the mandate of the law (Ainsworth, 2006, pp. 34). For example, it is said that an administrative action, that does not conform to the principle of strict legality, abuse of functions of a public official, or acts of a private entity that exceeds the limits of its sphere of action are ultra vires, because all these acts go beyond the strength, competence or authority under the law. We can define the Start Ultra Vires as the legal principle considered null acts of public or private entities that exceed the limit of law, aimed prevent an administrative authority or entity of private law or public act more beyond their competence or authority. In this sense, the ultra vires principle applies in all branches of law. For example, in administrative law is considered ultra vires the abuse of functions of administrative officials in exercising their functions, the right of corporations are considered ultra vires action by a society outside of objects contained in the articles of incorporation (articles of incorporation), and so on (Chaski, 2001, pp. 56).

2: Key Points

Ultra Vires Principle, Anglo-Saxon was first used in the right business partnerships in the decision concerning the case Ashbury Railway Carriage and Iron Co. Lid vs Riche presented at the "House of Lords" (court) of the United Kingdom in 1875. In this case, the parties debated the interpretation of the law regulating the social order in the Companies Act 18622. The debate focused on parts determine if the quality of people in these societies were allowed, as individual, freely make all kinds of lawful activities, or if activities of companies that we were not expressly authorized clause of purpose are prohibited and; therefore, illegal(Bowers, 1989, pp. 67). The court ruled in favour of the second interpretation, considering that by maintained control over the acts of the companies was vested protection to shareholders and trading partners for the following reasons: 1. Shareholders are protected because they kept fully aware of the activities, that your company and were guaranteed that their investment is not apply in ...