Commonwealth Consolidated Acts

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CORPORATIONS ACT 2001 - SECT 1.5.11

Disagreements within the company

11.1 Special problems faced by minority shareholders

                   There are remedies available to a shareholder of a company if:

•     the affairs of the company are being conducted in a way that is unfair to that shareholder or to other shareholders of the company; or

•     the affairs of the company are being conducted in a way that is against the interests of the company as a whole.

                   A Court may, for example, order the winding up of a company or the appointment of a receiver.

[sections 232-235, 461]

11.2 Buy--back of shares

                   A company may buy back the shares of a shareholder who wants to sever their relationship with the company.

[sections 257A--257J]

11.3 Selling shares

                   A shareholder in a company who wants to sever their relationship with the company may decide to sell their shares. However, the shareholder may not be able to sell their shares readily--particularly if they want to sell their shares to someone who is not an existing shareholder. Some of the difficulties they may face in that case are:

•     under the replaceable rules the directors have a discretion to refuse to transfer the shares; and

•     restrictions in the company's constitution (if any) on transferring shares.

[sections 707, 1041H, 1091D-1091E]



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