Law
LAW 401 SEU Advantages and Disadvantages for Shareholders in the Control Group Discussion

Law 401

Saudi electronic university

LAW

Question Description

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General Instructions

This assignment is of 10 marks.

You are requested to respond to this question individually.

After completing your assignment save your answers in a WORD format or PDF format and attached it to the appropriate place in your blackboard

Last Date for submission is April 16, 2020

- Answer the following Essay Type Questions:

1- Write down and explain the advantages and disadvantages for shareholders in the control group. (2.50 marks)

2- Illustrate the different types of mergers in details, mentioning how- when - why it occurs? (2.50 marks)

3- Explain in details the two types of corporate litigation. And illustrate the nature of the derivative suit. (2.50 marks)

4- Explain in details the different types of acquisitions. (2.50 marks)

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Final Answer

Attached.

Running head: COMPANY LAW

1

Company Law
Student’s Name:
Institutional Affiliation:

COMPANY LAW

2
Company Law

Advantages and Disadvantages for Shareholders in the Control Group
One of the primary benefits of controlling shareholders is their ability to exercise veto
power. Biondi and Graeff (2020) affirm that such shareholders can change decisions from board
members, mainly if the choices are not in line with their objectives. It, therefore, creates an
environment for making strategic decisions from the controlling shareholders. The other
advantage is that shareholders in the control group get the best profits and dividends when the
company has an exemplary performance. The significant additional advantage stems from the
controlling shareholders keeping the management and the board of directors in check to thwart
them from mismanaging the firm (Biondi & Graeff, 2020). The reason is that the shareholders
aim to retain and increase their earnings. Even ...

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