Content area
Full Text
I. INTRODUCTION
Shareholder disputes in closely held corporations are currently one of the most complicated areas in business law.1 The majority of corporations are not large and widely owned, but rather are "closely held." 2 Closely held corporations typically have only a small number of shareholders who are family members or close associates and, in most cases, are managed by the majority shareholders themselves.3 Further, unlike shareholders in large, publically traded companies, shareholders in closely held corporations generally do not have an open market for selling their shares when management disputes arise. 4 Because there is no market for closely held corporate stock, these shareholders are essentially trapped. 5 Furthermore, because shareholders in closely held corporations are often a group of family members or friends, shareholder disputes tend to be heated because they are, or become, personal in nature.6 The option that is most available to minority shareholders is to bring a suit under shareholder oppression law. 7 The remedies currently available to oppressed shareholders in common law countries with sophisticated corporations laws, however, do not equitably and efficiently solve "the underlying problems of majority power and minority illiquidity in the closely held business."8
This Note critiques the remedies available to oppressed minority shareholders in closely held corporations by specifically focusing on shareholder oppression statutes in common law countries with sophisticated legal systems. 9 This Note focuses on common law countries because, historically, the laws in common law countries are more protective of shareholders than civil law countries.10 Specifically, common law countries have the "highest . . . incidence of laws protecting oppressed minorities."11 Despite the fact that this Note analyzes shareholder oppression laws offered in the most protective jurisdictions, the Note nevertheless concludes the remedies available do not adequately protect oppressed shareholders. Additionally, even though this Note compares and contrasts the laws in the United Kingdom, Canada, the United States, and Australia, it concludes all of the statutes, even the most protective, are inadequate.
As a brief roadmap, section II of this Note outlines the development of shareholder oppression law. Section III describes the ideal goal of available remedies-to be equitable and economically efficient. Additionally, the section notes that finding the right remedy is more difficult in closely held corporations due to the nature...