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Shareholder Litigation

Among the many categories of commercial law, shareholder litigation is common in the practice. Many corporations have shareholders or individuals who own a portion of the company in the form of shares. These shareholders have certain rights as joint owners of their company, and if those rights are violated, they also have the right to file a lawsuit against the corporation. Whether you’re a shareholder looking to file a lawsuit or a corporation facing such a lawsuit, the Kleyman Law Group’s commercial litigation lawyers have the experience necessary to ensure your rights are protected.

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Shareholder Rights

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The governing bodies of corporations are required to disclose specific kinds of information and uphold certain financial responsibilities to shareholders. In the state of New York, the shareholders of a corporation have specific legal rights to:

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➢ Examine the corporation’s books and records.

If shareholders who have owned stock in the corporation for at least six months or who own 20% or more of the outstanding stock have a legal right to inspect:

  • The company’s basic accounting records,  

  • The time duration of all meetings of shareholders, directors, or official committees,

  • The current list of the names and addresses of all company shareholders.

  • Any other records the corporation is required by law to keep.

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➢ Attend annual shareholder meetings.

A shareholder can insist that an annual shareholder meeting be held. This practice is often overlooked when the majority of the shareholders are also members of that company’s governing body that controls the daily operations; however, any shareholder has the right to submit a written request for an annual meeting to be scheduled.

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➢ Receive the shareholder’s rightful share of the profits.

By law, dividends must be paid to shareholders proportionate to the percentage owned. The only exception is when there are different classes of stock owned, such as preferred stock and/or common stock.

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➢ Insist that the corporation register shares in the shareholder’s name.

Shares of the company should be issued and registered in the name of the individual shareholder. This ensures the shareholder has legal proof of ownership with which to demand their rights in legal matters.

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➢Be included in company growth and resultant privileges.

When a successful corporation expands and takes advantage of new opportunities, shareholders have the right to participate in that expansion.

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➢ File a lawsuit against the corporation for violation of shareholder rights.

If any of the above rights are violated, a shareholder has the right to file a lawsuit against the corporation.


Get the Help of a Kleyman Law Group Commercial Litigation Lawyer

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Are you a shareholder who believes your rights have been violated? Is your corporation facing a lawsuit brought against you by a shareholder?

The commercial litigation lawyers at Kleyman Law Group are prepared to fight for your rights. Our extensive experience in business law qualifies us to represent either side in a shareholder lawsuit so you will never have to go without the legal protection you need.