Minority shareholders have no say in the management of the company and in the running the business. A minority shareholder cannot do anything if the management of the company is inefficient. It is only the company itself that is the majority shareholders who can take action, and provided directors act in good faith and in the interests of the company as a whole, the majority shareholders can do anything permitted by the Memorandum and Articles and can ratify almost any transaction, even retrospectively, in general meeting.
A sole shareholder can, however, sue the company in his own name to protect his individual rights, for example to compel board to accept his vote at the general meetings or if there is unfair prejudice, fraud or gross negligence. A group of 10 percent of the shareholders can call in the Department of Trade and Industry to investigate the company and in some circumstances the court can take actions against the management. The directors may then lose the protection of limited liability and be ordered to compensate the company or the shareholder for loss.
Canterbury Accountancy - Information for companies
