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LSDefine
Simple English definitions for legal terms
shareholder oppression
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A quick definition of shareholder oppression:
Shareholder oppression is when the people in charge of a company treat the smaller owners unfairly. This can happen in a small company where a few people have a lot of power. It's like when a big kid takes all the toys and doesn't let the little kids play. It's not fair and can hurt the little kids. In the same way, shareholder oppression can hurt the smaller owners of a company.
A more thorough explanation:
Shareholder oppression is a term used to describe the unfair treatment of minority shareholders by those in control of a corporation, especially in a close corporation. This can include actions such as withholding information, denying access to corporate records, or excluding minority shareholders from important decisions.
For example, if a group of majority shareholders in a close corporation decides to sell the company without consulting the minority shareholders or offering them a fair price for their shares, this could be considered shareholder oppression.
Shareholder oppression can have serious financial consequences for minority shareholders, who may be forced to sell their shares at a loss or lose their investment entirely. In some cases, minority shareholders may be able to take legal action to protect their rights and seek compensation for any damages they have suffered.