Shareholders’ Rights
Shareholders are typically only liable for unpaid amounts on their shares and, in the case of limited companies, are not responsible for the company’s debts beyond this. Shareholders may exercise their rights selfishly, but limits exist to prevent abuses such as expropriation or oppression of minorities. Rights may also vary depending on the share class, such as preference shares offering fixed dividends and priority over ordinary shares.
Dividends require distributable profits and are recommended by directors before shareholder approval. Transfer restrictions, including pre-emption rights, often apply in private companies to maintain control among a specific group. Share valuations in private companies can be contentious, requiring expert determination based on methods such as net asset value or discounted cash flows.
Calls on unpaid shares may be enforced by forfeiture or lien. Overall, shares reflect a complex mix of rights and obligations governed by statutory and constitutional rules.
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