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PART 1.5 - SMALL BUSINESS GUIDE    View history reference

11  Disagreements within the company  

11.1  Special problems faced by minority shareholders.  

There are remedies available to a shareholder of a company if:

· the affairs of the company are being conducted in a way that is unfair to that shareholder or to other shareholders of the company; or

· the affairs of the company are being conducted in a way that is against the interests of the company as a whole.

A Court may, for example, order the winding up of a company or the appointment of a receiver.

[sections 232-235, 461]

11.2  Buy-back of shares.  

A company may buy back the shares of a shareholder who wants to sever their relationship with the company.

[sections 257A-257J]

11.3  Selling shares.  

A shareholder in a company who wants to sever their relationship with the company may decide to sell their shares. However, the shareholder may not be able to sell their shares readily - particularly if they want to sell their shares to someone who is not an existing shareholder. Some of the difficulties they may face in that case are:

· under the replaceable rules the directors have a discretion to refuse to transfer the shares; and

· restrictions in the company's constitution (if any) on transferring shares.

[sections 707, 1041H, 1091D-1091E]

[CCH Note: The references to sections "1091D-1091E" are legislative oversights. The references should be to sections "1072F" and "1072G".]


This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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