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ARTICLE · 06 MAY 2021

Protection As A Minority Shareholder

SchoemanLaw Inc.
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As a minority shareholder of a company, it is key to ensure that the Shareholders Agreement of the company enshrines the rights of minority shareholders.

South AfricaCorporate/Commercial Law
Schoemanlaw Inc.
Schoemanlaw Inc.

As a minority shareholder of a company, it is key to ensure that the Shareholders Agreement of the company enshrines the rights of minority shareholders. Minority shareholders find protection in the provisions contained in the Companies Act, as well as through ensuring that the Memorandum of Incorporation and Shareholders Agreement specifically contains additional protection of their rights. So, what protection of rights are available to minority shareholders to protect the proprietary interest in the company?

The Companies Act

Section 163 of the Companies Act is important for minority shareholders, as it provides that a shareholder may make application to the court for relief, should they be of the opinion that they have been oppressed or unfairly prejudiced or disregarded. Over and above this, the Act further provides that a Director may seek the same relief on behalf of a shareholder. Thus, if the court find that the conduct of the company was oppressive

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