New Jersey\u2019s General Corporations law establishes an important statutory remedy for oppressed minority shareholders in a closely held corporation.\u00a0 It is critical to understanding your rights as a shareholder, however, to understand who is considered under the statute to be a minority shareholder.\u00a0 You may well think, I own 50% of the stock in my company so, I can\u2019t possibly be a minority shareholder. Well, if that is what you think, then you are potentially shortchanging yourself.<\/p>\n
An owner of 50% of closely held corporation’s stock can be considered a \u201cminority shareholder\u201d within the meaning of N.J.S.A. 14A:12-7(1)(c).\u00a0 Bonavita v. Corbo<\/span>, 300 N.J.Super. 179, 188 (N.J.Super.Ch. 1996).\u00a0 Thus, even where a corporation is owned equally by two shareholders, a court may order an equitable remedy to a shareholder dispute upon proof that the \u201cminority\u201d shareholder has been oppressed, or the majority shareholder has acted fraudulently or illegally, mismanaged the corporation, or abused their authority. Depending upon the particular circumstances of the case, one court has even indicated that in appropriate circumstances the owner of 98% of stock in closely-held corporation could be considered a \u201cminority\u201d shareholder.\u00a0 The existence of voting agreements and other control restrictions may tilt the playing field in your favor.<\/p>\n","protected":false},"excerpt":{"rendered":" Even where a corporation is owned equally by two shareholders Courts may order an equitable remedy <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[245,99,65,248],"tags":[],"coauthors":[173],"class_list":["post-1273","post","type-post","status-publish","format-standard","hentry","category-corporate-ma-insights","category-pierce","category-insights","category-litigation-insights"],"acf":[],"yoast_head":"\n