In case of any dispute amongst the shareholders, after considering the small print of the Article’s of association, the next most important work of a shareholder is to understand section 459 of the Companies Act, 1985. The most important portion of the same reads as follows:
“A member of a company may apply to the court… for an order under this Part on the ground that the company’s affairs are being or have been conducted in a manner which is unfairly prejudicial to the interests of its members generally or of some part of its members…”
This section attempts to protect the minority shareholders in situations where the majority shareholders try and act against the interest of the minority shareholders. Minority shareholders enjoy the right to complain to the court if the majority shareholders run the company in a manner that causes damage to the position of the minority shareholders in the company. The complaint must not contain petty issues. Issues like using company assets or money for personal use or drawing far more money than other people in the same position draw are of major concern and can be laid down in the complaint.
