Description
Academic level: | PHD |
Subject or discipline: | Law |
Title: | shareholders rights and liability |
Number of sources: | 2 |
Provide digital sources used: | No |
Paper format: | MLA |
# of pages: | 7 |
Spacing: | Double spaced |
# of words: | 1925 |
# of slides: | ppt icon 5 |
# of charts: | 0 |
Paper details: | the researched paper will be graded on: (1) focus on addressing the research topic, (2) evidence of critical evaluation, (3) development of effective arguments in relation to the research topic, (4) appropriate style of footnoting and referencing |
Explanation & Answer
Attached.
Surname 1
Student’s Name
Instructor’s Name
Course Number
Date
Shareholders Rights and Liability
Rights and obligations of shareowners in any given institution depend on various
provisions that are pre-outlined in different documents. Some of these articles include the
company’s articles of association, shareholder agreements, any terms outlined during the
issuance of the shares, and provisions outlined in the Companies Act (Moscow and Cyril 2). The
investors inject their money into the organization and in return, they have some rights that they
enjoy. The rights may vary depending on the type of shares acquired by the corporation. In
addition to the prerogatives, there is a downside whereby they are expected to be accountable for
some obligations as spelled out in the organization’s constitution. This article will go through the
special privileges enjoyed by shareowners as well as some of the liabilities.
Investors are a part of the company and as such need to be viewed as a legal entity on
their own. It means that they can acquire property; they can press charges against others and be
sued as well. Any company requires a minimum of one shareholder and a maximum of fifty in
proprietary companies (Moscow and Cyril 3). They can be either an individual or a different
corporation owning shares in the enterprise in question. Types of rights vary to various
organizations depending on the type of shares offered or acquired (Soderquist and Larry 10).
Ordinary shares are the most regular class of shares found in numerous companies. However, in
other cases, the law is flexible providing the possibility to create more categories of rights, which
are then put down in the company’s articles.
Surname 2
COMMON RIGHTS ENJOYED BY SHAREHOLDERS
Firstly, they are entitled to attending shareholder meetings and casting votes on the
central issues (Soderquist and Larry 20). In organizations, there is an arrangement of various
assemblies including annual and special forums. Usually, the annual meetings are held to vote
for new directors and address various issues concerning the institution. Ad hoc meetings on the
other hand are held whenever an issue arises in the corporation requiring immediate attention
from the shareholders. Some of the questions that are voted upon include proposals put forth by
different members as well as other fundamental changes affecting the institution. Examples
include mergers and liquidation which are very critical as they touch on the core investment of
the members. Usually, each share carries a single vote and hence during the ballot process they
are treated as such. However, there are some that are considered non-voting shares whereas
others have multiple voting capacities (Moscow and Cyril 6). In other cases there are some
shares have only the ability to participate in polls in only particular...