What is your percentage of the shares as this may effect your actions
General shareholders' rights
5. What are the general rights of all shareholders? How can shareholders' rights be varied (for example, additional rights attaching to a class of shares, or limitations on shareholders' rights)? Are such variations generally provided in the company's bye-laws and shareholders' agreements?
Shareholders usually have the same basic rights regardless of whether the company is private or public. The rights of shareholders depend on the rights attaching to their shares under the company's articles of association. Different shareholders can enjoy different rights and this is usually effected by a company having different classes of shares. Such rights are usually provided in the company's articles of association. There is no limit on the number of different classes of shares a company can have.
Shareholders' rights can include special rights, including:
- Rights relating to the appointment of directors.
- A right to be consulted or informed before the company takes a particular action.
- Weighted voting rights.
The rights of shareholders can be limited, modified or waived. However, shareholders cannot be financially liable for more than the amount unpaid on their shares. Shareholders can agree with the company and/or between themselves that their rights are restricted. For example, a share may be non-voting (that is, the holder cannot vote at a meeting of the company) or may not entitle the holder to payment of a dividend. The articles of association of the company may entrench certain rights so that, for example, a set percentage of the shareholders must vote in favour of varying a right. Entrenched provisions in a company's articles of association can be amended by agreement of all the company's shareholders.
If a company has more than one class of shares, the articles of association often contain a provision to the effect that the rights of that class cannot be varied by changing the rights of another class without the consent of the holders of the first class of shares.
Variations of rights are usually provided in the company's articles of association, although they can be included in a shareholders' agreement if the variation only applies between two or more shareholders.
6. Briefly set out the rights of minority shareholders and the shareholding required to exercise such rights.
Minority shareholders' rights vary depending on the percentage of shares/voting rights they hold in the company, as follows:
- At least 5%: right to:
- apply to court to prevent the conversion of a public company into a private company;
- call a general meeting;
- require the circulation of a written resolution to shareholders (in private companies); and
- require the passing of a resolution at an annual general meeting (AGM) of a public company.
- At least 10%: right to call for a poll vote on a resolution.
- More than 10%: right to prevent a meeting being held on short notice (in private companies).
- 15%: right to apply to the court to cancel a variation of class rights, provided such shareholders did not consent to, or vote in favour of, the variation.
- More than 25%: right to prevent the passing of a special resolution.
