What rights do I have as a minority shareholder?
Minneapolis attorney Scott Benson of Briol & Associates explains how minority shareholders can take legal action if there is a deadlock in the company and review the accounting books.
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The majority shareholder generally has the right to control the company and to put management in place, or to be the management, and make the day-to-day decisions with regard to the direction of the company. With those rights, of course, come duties. They have fiduciary duties to their fellow shareholders. They have the duty of loyalty, for example, or the duty to act in good faith. They have duties not to misapply the corporate assets or to be engaged in fraudulent conduct and that type of thing as well. And so, while the majority shareholder certainly has the right and the obligation to run the company in the way that they see fit and the best way that they see fit for the company – and they’re protected, for the most part, if they exercise their business judgment to the best that they know how and for the best purposes. They’re protected in the law in doing so, and so they have a right to run their company and do what they think is best.