Exit rights of minority shareholders in a private limited company
Einde inhoudsopgave
Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/1.3.2:1.3.2 Developments in common-law countries
Exit rights of minority shareholders in a private limited company (IVOR nr. 72) 2010/1.3.2
1.3.2 Developments in common-law countries
Documentgegevens:
mr. dr. P.P. de Vries, datum 03-05-2010
- Datum
03-05-2010
- Auteur
mr. dr. P.P. de Vries
- JCDI
JCDI:ADS408493:1
- Vakgebied(en)
Ondernemingsrecht (V)
Toon alle voetnoten
Voetnoten
Voetnoten
Law Commission (1997); DTI (2001).
As of 1990, these rules were contained in the RMBCA. Nowadays, see § 14.30(2)(ii) in conjunction with § 14.34 RMBCA, as lastly revised in 2006. The RMBCA concerns a model act drafted by a committee of the American Bar Association. Many states have adopted this model act.
§ 13 RMBCA, as lastly amended in 2006.
Deze functie is alleen te gebruiken als je bent ingelogd.
Compared with the winding-up remedy, the oppression remedy in common-law countries is still fledgling. Although a statutory oppression remedy existed in England as of 1948, found in S. 210 CA 1948, it took until 1980 before this remedy was amended in order to provide an effective exit remedy. Due to the liberal interpretation of the sections used by the courts, the oppression remedy, nowadays known as the 'unfür prejudice remedy', quickly gained popularity. In the last decade, several reviews of English company law have been carried out, in which the functioning of this exit remedy was examined more closely.1
Corresponding developments appeared in the legai systems of other Commonwealth countries, such as South Africa, Canada, Australia and New Zealand. These countries are all familiar with oppression remedies. The first to introduce a well-developed oppression remedy was South Africa, as still embodied inS. 252 Companies Act 1973. Canada followed in 1975. Nowadays, the Canadian oppression remedy lies in S. 241 CBCA. Australia has had an oppression remedy since 1983, which is found in Part 2F.1 Corporations Act 2001. Around the same time, New Zealand took similar steps. At present, S. 174 Companies Act 1993 contains this remedy. The roots of all aforementioned oppression remedies can be traced back to the English oppression remedy of S. 210 CA 1948.
Around 1990, several states of the United States of America, following the RMBCA, introduced winding-up remedies that allow shareholders to apply for the dissolution of close corporations in cases of inter alia deadlock, illegal, oppressive or fraudulent conduct by the directors or those in control of the corporation or waste of corporate assets.2 In lieu of a winding-up remedy, the company or co-shareholders may also elect to purchase all shares of the petitioning shareholder at the für value of the shares. This second option can be regarded as an oppression remedy.
The RMBCA also includes a range of appraisal rights, which took on their current form in the RMBCA review of 1999. A shareholder is entitled to these appraisal rights and to obtain payment of für value of his shares in case of inter alia merger, share exchange, disposition of assets of the corporation, and conversion of the company to non-profit status, provided that the shareholder is entitled to vote on this matter.3