Bu231 Corporate Governance Shareholders .docx

Bu231 Corporate Governance Shareholders .docx - Bu231...

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Bu231 Corporate Governance Shareholders Voting: - Ability to vote depends on class of shares - Closely held corporation – often some classes of shares have more votes - In widely held corporation, SH can nominate a proxy to vote on their behalf Preferred shareholders can receive dividends Return on investment: SH purchases shares in corporation as an investment Can realize on that investment in 2 ways: 1) By way of dividends 2) Capital Growth Issuing new shares: - Power lies with the board - Majority SH could lose majority position with an new issue o In USA – Concept of “pre-emptive rights” allow existing shareholders to buy a proportion of new shares about to be released o In Canada – No such right, but directors can only issue shares for purpose of raising capital (not a right but can still offer it to existing shareholders first) o If purpose Right to Information - Annual financial statement must be presented to SH at the AGM - SH are empowered to elect an auditor or directors to check books for discrepancies, but neither has to oblige ( auditor/director - SH would have to ask courts to have an inspector appointed (need to show pimae facie
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  • Fall '19
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