INTRODUCTION A company is considered to be a legal entity and is separately distinguished from its members. It is governed by the board of directors who are selected to manage the company. However, the capital required to run the company is provided by the shareholders. As the company is owned and managed separately, individual shareholders especially minority shareholders are vulnerable to oppression from the powerful board of directors or powerful majority shareholders. Therefore, various provisions in corporate law are provided to ensure that company members have statutory rights and remedies. In India, the Companies Act, 2013 is the main statute regulating the corporate structure and provides members of a company with rights and remedies. SHAREHOLDERS RIGHTS UNDER COMPANIES ACT, 2013 The rights available to shareholders can be generally divided into voting rights, property rights and information rights. This ensures that the members have a say in major decisions and share in the company’s profits. 1. Voting Rights Shareholders have the right to vote in General Meetings. As per the Companies Act, members have the right to attend Annual General Meetings and Extraordinary General Meetings either in person or by proxy. They have the right to vote according to the number of shares held. Major decisions of the company such as changes to the Articles of Association/Memorandum of Association, auditor appointments/removal and restructuring of the company must be approved by members through an ordinary or special resolution. 2. Property Rights Shareholders have an interest in the profitability of the company. They are entitled to receive dividends which must be recommended by the board and then declared by shareholders in General Meeting. As dividends are declared they become debts owed to shareholders by the company. Shareholders also have the right to receive a prorata share of the remaining assets upon liquidation of the company. 3. Information Rights As transparency is an important aspect of corporate law, shareholders have the right to access the register of members, minutes of general meetings and the annual accounts of the company. This enables members to keep an eye on the performance of the company’s management. SHAREHOLDER REMEDIES Despite having numerous provisions relating to the rights of shareholders, often the majority shareholders or directors will act negligently and cause issues for minority shareholders. The Companies Act, 2013 has introduced several remedies which can be used by those affected. This moves away from strict common law remedies such as the rule in Foss v. Harbottle. Oppression and Mismanagement Section 241 and 242 of the Companies Act allows members to apply for remedies if they feel that the company is being run in a way that is prejudicial to the public, oppressive to members or there is significant mismanagement. Oppression means that the company is being run without honesty and fair dealing and causing prejudice to shareholders. Mismanagement means that the company is being run in a manner that causes prejudice to the company or members. Section 242 gives the National Company Law Tribunal wide ranging powers. If the tribunal is satisfied that there is oppression or mismanagement, they can order that the company’s affairs are to be run in a certain manner, order that members’ shares are bought back by other members or by the company. They can also order that the company’s constitutional documents be changed. Class Action Suit This new progressive measure was included under section 245 of the 2013 Act. This provides shareholders/depositors with the right to bring a claim against the company, directors or auditors if they have acted fraudulently, unlawfully or prejudicially. This enables small shareholders to come together and claim damages or injunctions from the company. Statutory Minority Rights If the company makes fundamental changes such as mergers, amalgamation or changes to limit the transfer of shares, minority shareholders are often protected. This includes giving the shareholders the right to request a fair valuation and repurchase of their shares. CONCLUSION To ensure that companies are managed well whilst protecting the rights of investors is key to having a successful market. The Companies Act, 2013 has improved this by introducing proactive measures to protect minority shareholders. It has also given shareholders more rights to ensure that they are protected and also introduced powerful remedies such as class action suits and the NCLT to deal with cases of oppression and mismanagement. Overall, by understanding and using the rights and remedies provided to shareholders, they are able to protect their investments.