Introduction There are two types of shareholders, namely the majority shareholders and the minority shareholders. Minority shareholders refer to those who own less than 50% of the companyâ€™s shares and thus do not possess voting power in the company. Generally, those who have shares in a company must follow the majority rule.
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However, the law has granted several rights to the minority shareholder to protect their interests. There are three basic rights of minority shareholders, namely, right to seek information, right to voice opinion and right to seek remedy. The minority shareholder will also have the right not to be compelled to take over more shares without his consent in writing. This is provided under section 33(3) of Companies Act 1965. Besides, the minority shareholder will also have the right to make application of winding up the company. This can be found under section 218 of the Companies Act. Next, the minority shareholder is also granted with the right to seek relief in cases of oppression or unfair discrimination. Section 181 of Companies Act 1965 states that, â€œAny member of a company may apply to the Court for an order on the ground that the affairs of the company are being conducted in a manner oppressive to one or more of the members or that some act of the company has been done which unfairly discriminates against one or more of the membersâ€. Besides, the minority shareholder will also have the right to request to the Court to make an order to call an Annual General Meeting. This is stipulated under section 143(4) of the Companies Act 1965. On the other hand, section 148(1) of the Companies Act also clearly indicates that the minority shareholder will also have the right to attend any general meeting of the Company and to speak and vote on any resolution before the meeting. Furthermore, section 149(1) of the Companies Act further states that the minority shareholder appoint another person or persons as his proxy to attend and vote instead of himself at a meeting of the Company. On the other hand, the minority shareholders may also exert pressure on the companyâ€™s directors to be more accountable and transparent. Generally, all shareholders, including minority shareholders should also have the right to seek remedy when their rights have been violated. In Malaysia, the Minority Shareholder Watchdog Group which was formed on 30th August 2000 provides protection to minority shareholders of public companies over their interests. What is Minority Shareholder Watchdog Group The Minority Shareholder Watchdog Group (MSWG) was established in Malaysia on 30th August 2000.
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