Company Shareholder’s Rights to Dispute


Those who own shares in any proprietary company (which means it has a “Pty Ltd or P/L in the name”), might have right that they are not aware of. This could include the right to access certain information regarding the company. It could also include the right to ask the company to hold a meeting of its members, which would be done under specific conditions.

Any company that does not follow through in providing what shareholders are entitled to, might be subject to dispute between members and the company, including the directors which could require experienced commercial lawyers to sort out. Some of these disputes about rights might include the following:

  • Not enough general meetings.
  • A company not acting in the best interest of the members.
  • Not providing access to the company’s register.
  • Legal action being brought against directors by members.

The constitution of a company details what the company has the right to do, and what it is obliged to do, including the rights and obligations of directors, officeholders, and members. In this manner, the constitution works similarly to a contract, but a breach of it is not a criminal offence. Private actions must be taken in order to enforce this contract. Disputes need to be settled by the parties, but the court system can be involved when this fails to happen.

There are certain rights that the law automatically grants to members. Examples of these rights include being able to look at the company’s register without being charged any fees, and to have copies of it. In some circumstances, members also have the right to ask directors to hold meetings, as stated, but this is not always the case. It is best to look at the constitutional rights of the members, before making any assumptions, or attempting to take action against a company or its directors.

How to Take Action

If you want to resolve any disputes about your rights as a member, there is a range of choices available:

  • Contact them. Writing to the company and telling them about your primary concerns is a good idea. Depending on the percentage of votes that you hold, you might be able to request that further action is taken.
  • Get legal help. Once you have already tried to resolve the issue by contacting the company, without gaining satisfaction, it’s a good idea to seek legal advice.

Court orders. In more extreme cases, when members don’t think they are getting the appropriate results from the directors of a company, they can initiate legal action for the company, via the court.