Minority Shareholder Agreements now available
A new precedent suite on minority shareholder agreements has now been published on smokeball. The marginalisation of one shareholder or group of shareholders is called ‘shareholder oppression’. The shareholder oppression claims heard in Australian courts occur in situations where a minority shareholder (or shareholders) are being unfairly treated by a larger (and usually a majority) shareholder. The oppressive conduct provisions of the Corporations Act are commonly used in conjunction with a claim of breach of director’s duty or in bringing an application to wind up the company entirely. Situations in which shareholder oppression occurs may be avoided by using a minority shareholder agreement, particularly in situations where the minority shareholders are making a significant financial contribution to the company.