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.