Legal Dive’s Post

Minority squeeze-outs are a somewhat complex and legally-regulated practice that involves the expulsion of minority shareholders by majority shareholders in a company. As such, they have significant implications for corporate governance, legal framework, and ethical considerations.    In this article, our Senior Associate, Amanda Opara and Associates, Faith Emmanuel and Egwu Chidinma examined two (2) squeeze-out options by 90% Majorities under the Investment and Securities Act, 2007 (as amended) and the Companies and Allied Matters Act, 2020 (as amended). They also considered whether and, if so, how far the examined provisions on squeeze-out are sufficient in practical terms to achieve their intended purpose. Read here - https://lnkd.in/d23kKnDR #GElias #CorporateGovernance #LegalRegulations #EthicalConsiderations #MajorityShareholders #Investment #SecuritiesAct #CAC #CompaniesAndAlliedMattersAct #ShareholdersRights #LegalFramework #EthicalBusiness #ShareholderExpulsion #Corporate #Law

Last week, the FCA finally published the new UK Listing Rules (which come into effect on 29 July 2024) moving to a ‘disclosure-based philosophy’.  Most commentators appear to support the changes on the basis they are designed to make UK listings more attractive to new entrants. Our concern is shareholder rights have been diluted. See here for more information on why we take this view https://lnkd.in/eGBAQ3Jq. We think shareholders will have to become more assertive challenging boards of listed companies where they disagree with strategy, especially making significant transactions.  You can also find our insights into rights shareholders have to hold boards of UK listed companies accountable here https://lnkd.in/e6k6KVtn.

When navigating the intricate landscape of corporate finance, shareholder rights and share option agreements, questions often arise regarding the status and rights of share option holders within a company. In this SERR Synergy article written by Carel Dauth, one of our B-BBEE Professionals, we delved into the provisions of the Companies Act 71 of 2008, which offers valuable insights into the relationship between share option holders and shareholders. To read the full article, please follow the below link: https://lnkd.in/dyibdnfV To find out how our professional team can assist your business with legal compliance, please visit our website www.serr.co.za or contact any of our nationwide offices. #serrsynergy #shareholders #shareoptions #votingrights #legalprofessionals #legaladvise #businessconsulting #shareholderrights

Public company friends, please find a link to a great insight article on the Council of the Corporation Law Section of the Delaware State Bar Association's proposed amendments to the Delaware General Corporation Law. If enacted by the General Assembly, these amendments will address issues raised in three recent high-profile Delaware Court of Chancery decisions regarding the validity of stockholder agreements on corporate governance rights, the process required to approve merger agreements, and corporations’ ability to contract for “lost-premium damages” in merger agreements. The proposed amendments would align the governing statutes with general market practices. #wearemorganlewis, #publiccompanies

Have you attended a virtual-only shareholder meeting recently? Did it seem like there was little input or commentary from shareholders? Were you surprised by how quickly the meeting matters were dealt with?   As outlined in our opinion piece in today’s Globe and Mail, we believe shareholders are being denied their corporate law rights to discussion and debate at virtual-only shareholder meetings.   Without intervention from Canadian securities regulators, shareholders may continue to be silenced. Paul Finch Emma Pullman #virtualmeetings #shareholders #corporategovernance #corporatelaw

Disputes between shareholders in limited companies seems to be a hot topic at the moment, particularly judging by the number of attendees at recent seminars. Aidan Reay of Kings Chambers gave a particularly good practical tips seminar on unfair prejudice last week. These disputes can arise in any manner of circumstances, but in small companies they can often be caused by a clash of personalities or in a couple of my recent cases by the outside influence of one shareholder/director’s significant other, causing havoc to the running of the business. As always, early advice should help and early settlement is usually best for all concerned. If agreement can’t be reached to allow everyone to continue working together then a structured buy out of one party’s shares is usually the best outcome, without having to trouble the courts with an unfair prejudice petition. #shareholderdisputes #shareholderagreements #unfairprejudice #mediation

How to Protect Minority Shareholders' Rights Protecting minority shareholders' rights is essential for maintaining a fair corporate environment. Here are key strategies: ✅ Incorporate Protective Provisions in the Shareholder Agreement: Preemptive Rights: Allow minority shareholders to purchase additional shares to maintain their ownership percentage. Tag-Along Rights: Enable minority shareholders to join in the sale of shares on the same terms as majority shareholders. Cumulative Voting: Increase the chance of minority shareholders electing a representative to the board. ✅ Implement Strong Corporate Governance: Board Representation: Ensure minority shareholders have a seat on the board. Transparent Reporting: Provide detailed financial reports and disclosures. Independent Audits: Conduct regular audits to prevent misuse of resources. ✅ Legal Protections and Remedies: Minority Buy-Out Rights: Allow minority shareholders to sell their shares at a fair price if they disagree with major decisions. Oppression Remedies: Enable legal action if their rights are oppressed. Derivative Actions: Allow legal action on behalf of the company if directors fail in their duties. ✅ Enhance Communication and Engagement: Regular Meetings: Hold frequent meetings for minority shareholders to voice concerns. Advisory Committees: Include minority shareholders in decision-making. Effective Communication Channels: Keep minority shareholders informed and engaged. ✅ Adopt Fair Policies and Practices: Equitable Dividend Policies: Ensure fair dividend distribution. Fair Valuation Methods: Use transparent methods for valuing shares. Conflict Resolution Mechanisms: Establish fair mechanisms for resolving disputes. Conclusion: Protecting minority shareholders' rights fosters trust and balance in a corporate environment. By incorporating protective provisions, implementing strong governance, ensuring legal protections, enhancing communication, and adopting fair policies, companies can safeguard minority shareholders effectively. #CorporateLaw #MinorityShareholders #ShareholderRights #CorporateGovernance #BusinessLaw #LegalAdvice #FairPractice #BoardRepresentation #Equity #Transparency

In today's complex business world, #shareholderdisputes are common. They can be divisive, expensive, last a long time — and arise without warning. This article describes the different types of disputes, including those related to shareholder agreements, and provides proactive considerations to help ensure your investment is protected.

An overwhelming majority of #privateequity firms in a recent #survey are poised to buy publicly listed companies to take them private in #2024 despite a #challenging market, according to a report by international law firm Dechert LLP and data analysis company Mergermarket Ltd. Dechert said that the management teams of public companies now appear to be more accommodating to #offers from private equity firms, as the markets have endured prolonged price declines. #2024trends #privateequity #privatisation #delist My article on the latest version of Global Private Equity Outlook report.

In our latest article, Principal Robert Speed and Lawyer Jordan Baird discuss the practice of paying different dividends on shares within the same class in Australia. Read more below. https://lnkd.in/g-Ue_Sbe #corporatelaw #business #dividends #shares #insights #australia #legal