What powers does a shareholder have after acquiring a minority stake in a company?
- By : Wong Mei Ying
- Category : Company Law, Linkedin Post, Mergers and Acquisitions
This question often arises when a purchaser considers acquiring a minority stake in a private company. Under the Companies Act 2016, shareholders with a minority stake in a private company have the following rights and powers:
| Minority stake | Rights and powers |
| At least 5% of the total voting rights
|
· Require the private company to circulate a resolution that may properly be moved as a written resolution.
· Require a meeting of members to be convened if more than 12 months has elapsed since the end of the last meeting of members convened pursuant to a requisition under the Companies Act 2016 and the proposed resolution is not defamatory, vexatious or frivolous.
· Give notice to the private company to prevent the re-appointment of an auditor.
|
| At least 10% of the total voting rights
|
· If such shareholders consider that the payment of fees of the directors and any benefits payable to the directors including any compensation for loss of employment of a director or former director, was not fair to the private company, within 30 days after they have knowledge of such payments, they may require the company to pass a resolution to approve the payment.
· Demand voting on a poll before or on the declaration of the result of voting on the show of hands at any meeting of members.
|
| At least 10% of the total voting rights in the relevant class of shares
|
If the rights attached to shares in that class of shares in the company are varied, apply to the Court to have the variation disallowed.
|
| At least 10% of the issued share capital of a company or a lower percentage specified in the constitution
|
Convene a meeting of members.
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#malaysiancorporatelawyer
This post first posted on LinkedIn in October 2024.
