Distinguish between the following: Minority Shareholders and Dissenting Shareholders.

CS Executive · Company Law · PYQS · June 2019
Distinguish between the following: Minority Shareholders and Dissenting Shareholders.

Answer & Explanation:

Following are the main differences between Minority Shareholders and Dissenting Shareholders- Minority Shareholders Dissenting Shareholder Minority shareholders / shareholding is collectively ascertained and regarded as having non-controlling stake in the company. However, small shareholders can be included in and/or regarded as minority shareholders by virtue of their small shareholding amounting to non-controlling stake in the company are also known as small shareholder. Dissenting shareholder is one who disagrees with a fundamental transaction being contemplated by the majority shareholders. Minority Shareholders are the collective body of shareholders who do not have majority voting powers in a company Dissenting Shareholders are those shareholders who do not agree to a proposal in a meeting of members which have been agreed to by the required majority The majority of the members enjoy supreme authority to exercise the powers of the company. However, the powers are circumscribed by rules of fair play The Dissenting Shareholders may not call the shots but they have been given specific remedies by law. The Dissenting Shareholders can take up their grievances and can file petition in the NCLT The court/NCLT will not generally intervene at the instance of minority shareholders in the matter of internal administration NCLT may intervene and provide relief only when the rights of Dissenting Shareholders are prima facie compromised by oppression otherwise NCLT may give only exit option to the dissenting shareholders. Any relief to the dissenting shareholders can be given only by the NCLT. In case of corporate restructuring including merger and amalgamation, the majority shareholders holding 90% of the equity share capital shall give an offer to the remaining 10% (minority share holders a buyout offer The majority shareholders have no compulsion to agree to the wishes of the Dissenting Shareholders.

Topics: Shareholders

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