Directors, Shareholders & Executives

Minority shareholders do hold less control compared to majority shareholders, but this doesn’t mean that their legal rights can be compromised. If you’re a minority shareholder, you have the right to review company information and finances, vote at shareholder meetings and apply your input into major internal events such as appointing a CEO or managing director.

The appointment of a director doesn’t need to be subject to passing a competency test. However, they do need to meet statutory and common law duties of care. A company could choose to place its own restrictions on directorship in its articles of association which could include such a requirement that a prospective director needs to own a specific amount of shares before being appointed.

There’s no legal requirement that says you must state your reason(s) for leaving in a letter of resignation. However, if you don’t, a tribunal could determine that your employer’s conduct wasn’t the reason for you leaving, even though it could have been.

Various conditions must be met for a settlement agreement to be legally valid. One of these (and the most critical) is that you must receive independent legal advice from an experienced professional. Here at BTMK Solicitors, we’re able to provide you with advice on the terms of a settlement agreement and what the implications are of signing one.

A tailored shareholder agreement must address a series of matters, including management structure, director appointments, company financial statements, reporting requirements, market exit strategies, dispute resolution mechanisms, dividend policies and shareholder restraints.

Company shareholders do often benefit from “pre-emptive rights”, but it’s not an entitlement that’s bound by law. If pre-emptive rights do exist, new company shares can’t be offered to potential investors before being offered to current shareholders.

You can only be a director and have private dealings if it’s permitted in the company’s articles of association. You might be able to get money loaned to you from the company accounts, but this has to be approved by a board of shareholders and, in some scenarios, be formally approved by law.

With most companies, each acting director will have 1 vote, and internal decisions will be based on a majority vote. However, it’s possible that a company’s articles of association can establish a different voting system.