Rights and Duties of Majority Shareholders

Majority Shareholder Ethical Considerations

With those rights come many ethical considerations that are just as important. Such as:

• Duty of fairness - Majority owners have a duty to treat all minority shareholders fairly and equitably.
• Duty not to self-deal - The majority owner should avoid self-dealing transactions that benefit themselves at the minority's expense.
• Duty of good faith - Majority owners should act transparently and deal honestly with minority shareholders.
• Duty not to misuse control - The majority position should not be abused to force or coerce the minority owners.
• Duty of disclosure - Majority owners should disclose conflicts of interest and provide access to company information.
• Duty not to misrepresent - The majority should provide accurate, truthful information and not mislead minority owners.
• Duty to follow rules - Majority owners should adhere to company policies, bylaws, and applicable laws.
• Duty of competence - The majority should manage the company competently in the best interests of all shareholders.
• Duty of confidentiality - The majority has a duty to keep sensitive company information confidential.
• Duty to avoid oppression - Majority decisions and conduct should not be unjustly harsh or burdensome for the minority.
• Duty of accountability - The majority should explain and justify decisions impacting the corporation.

Hopkins Centrich Law, Your Shareholder Oppression Law Firm

Hopkins Centrich Law provides cutting-edge, high-quality, creative legal solutions for minority shareholders in Texas Closely Held Corporations when their rights have been abused by the majority owners. Our attorneys and staff have decades of experience in virtually every aspect of business law in The Woodlands and Texas. We have designed and incorporated businesses, managed their every legal concern, engaged in litigation on their behalf, aided with mergers and acquisitions, managed mergers, acquisitions, and sales.

Hopkins Centrich Law knows Texas business law. We are uniquely positioned to help shareholders when they have ample cause to believe their rights are being violated. When we work with a client, our sole focus is on them. We take advantage of everything technology has to offer in order to optimize how we work. That gives us more time to spend with you, more time to understand the issues, and more time to negotiate and prepare for trial.

We get that no one wants to contact a law firm unless they feel they absolutely have to. When they do, it almost always means that ‘things have reached a head.’ The attorneys and staff of Hopkins Centrich Law understand what you are going through. We will make the process understandable; you will know what is happening with your case every step of the way, and you will never have to track us down for answers.

What to Do If You Think Your Minority Rights are Being Violated

First, do not believe anything you read online, or listen to someone who tells you that the Texas Supreme Court did away with Shareholder Oppression lawsuits. The Court merely limited some of the basis for bringing a Shareholder Oppression action. There are still many avenues to relief available, particularly where the majority shareholders have made decisions that are not In the best interests of the business.

Don’t wait. If you think your shareholder rights have been trampled on don’t hesitate to call. Don’t hope that things change, don’t let a matter fester, don’t try to solve the problem yourself through emails and letters and not-so-calm conversations. Contact us. The earlier you do, the better, there are deadlines for every legal action. The longer you wait, the fewer your legal options.