Oppression of a minority shareholder is often carried out
through otherwise lawful actions of the majority in exercise of
their strict legal rights. This can leave a minority shareholder
unable to point to a clear breach of his/her rights, and shield a
majority shareholder from complaint. A common example is the
removal of a minority shareholder from management through the
legitimate exercise of voting rights.
However, if it can be established that the relationship between
shareholders amounts to a "quasi-partnership" then
broader equitable principles can be introduced, to enable a court
to find that otherwise lawful actions are in fact oppressive. Where
a quasipartnership exists, a court can give effect to expectations
and informal understandings between shareholders as to how the
company is to run, even if these conflict with the majority's
strict legal rights.
