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Clauses privilégiées

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16:33 Dec 16, 2010
French to English translations [PRO]
Bus/Financial - Law: Contract(s) / shareholders' agreement
French term or phrase: Clauses privilégiées
Hi, this is my first post. The term "Clauses privilégiées" appears in a a list of topics to be addressed in a seminar on shareholders' agreements (Canada). As it is just a list, I do not have much more context, but it is grouped together with "-Protection des investisseurs (minoritaires), and -Mécanismes de protection".
I saw the post on "conditions privilégiées", could this be the same thing?
Thankyou
Caissey Nicole
Local time: 17:30
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Summary of answers provided
3Protection of minorities clause
fourth


Discussion entries: 2





  

Answers


3 hrs   confidence: Answerer confidence 3/5Answerer confidence 3/5
Protection of minorities clause


Explanation:
PROTECTION FOR MINORITY SHAREHOLDERS - SHAREHOLDER AGREEMENTS

Introduction

As we all know, a minority shareholding in a small or closely held company suffers from all kinds of disadvantages. Those disadvantages are accentuated where one shareholder or a group of closely allied shareholders own a majority of the shares. The disadvantages for a minority shareholder include:

* Problems of obtaining Board representation. Since directors are normally elected by a majority vote of the shareholders, a minority shareholder may be permanently shut out of the Board.

* Difficulty in ensuring that profits and surpluses are shared fairly among the shareholders. We have all heard horror stories where a 51% shareholder uses his control of the company to pay all surpluses to himself as directors fees, leaving the minority shareholders with no return on their investment. While the minority shareholders in this type of situation can seek relief under section 174 of the Companies Act 1993 on the grounds of oppression, such court proceedings can be extremely expensive and the courts have been notably reluctant to grant relief to oppressed minority shareholders.

* Difficulty in selling out for a fair value. Because of the above problems, it is always difficult to sell a minority shareholding, and usually it can only be sold at a discount on its fair value, and this problem is particularly acute for minority shareholders in companies where a single shareholder controls the company.



fourth
France
Local time: 23:30
Specializes in field
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