Rights Shield For Minority Shareholder

Reserved or veto or affirmative vote matters or consent rights are a bunch of contractually-agreed matters provided in a joint venture agreement or a shareholders agreement that need consent of all the partners before being approved and implemented.

They cannot be implemented unless the partners agree, even if the majority partner has sufficient shareholding to approve them. These matters generally protect the rights of the minority shareholders.

Due to the importance of reserved matters, minority shareholders are seen fiercely negotiating for them when a joint-venture agreement is discussed.

Some instances: amendments to the charter documents, declaration of dividend, creation and issue of new shares, appointment and removal of auditors, change of company's name or registered office, disposal of company's assets, investment in other entities beyond a certain value, company's dissolution, corporate restructuring, etc. Since these are critical matters, it