What are the Shareholder Remedies

Question

What are the Shareholder Remedies?

Answer 1

Derivative Action: Allows shareholders to pursue a legal claim against a wrong done to the corporation if the directors and officers fail to do so. This requires court approval.

Oppression: Allows shareholders to apply to the court to obtain relief against management and the corporation when management fails to act in their best interests (e.g. when management’s actions benefit the majority shareholder to the exclusion or detriment of minority shareholders or when management is planning to eliminate minority shareholders).

Winding Up: It is also called liquidation and dissolution, on application by a shareholder court may direct that corporation’s assets be sold, its creditors paid the remaining money distributed to shareholders and the corporation’s existence termination.

Dissent and Approval: Entitles shareholders who dissent from fundamental changes (e.g., sale of all or substantially all of the assets of the corporation) to have the corporation buy his or her shares.