Get Protecting Minority Shareholders In China:

Protections for Minority Investors Here are some of the most common protections: Board participation, including regular board meetings and approval requirements for significant transactions. Directors and officers liability insurance (D&O). The right to review the company's books, records, and financial statements.

Generally, a minority shareholder cannot, on their own, control a company. But they can work with other minority shareholders to overcome the majority's will in votes.

A minority shareholder may wish to protect their interest in the limited company by incorporating anti-dilution provisions into a shareholder agreement. Anti-dilution provisions protect shareholders from their investment becoming less valuable.

A shareholder cannot typically force another shareholder to sell their shares unless there is a contractual obligation entitling them to do so. For example, if there is a provision enabling such a sale in the company's Articles of Association, Shareholder Agreement or another valid contract.

Minority shareholders have a right to be notified of critical business decisions. Unless stated in the articles of incorporation, they have a right to vote for corporate officers and directors.

Shareholder activism under Chinese law Shareholders have the right to participate in the shareholders' meeting, to put forward opinions and suggestions on company affairs, and to exercise their voting rights. The shareholders' meeting is the decision-making body for a company's major affairs.

In company law, a minority shareholder has little if any power over the management of the company or the distribution of its profits.As a general principle, the majority rules. For instance, shareholders with less than 50% of the shares in the company cannot appoint a new director.

The best way to protect minority shareholders is to regulate problems before they arise. A well drafted, clear and concise shareholder agreement is in the interests of all parties.