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GLOSSARY

Minority shareholder definition

Published by a LexisNexis Corporate expert

What does Minority shareholder mean?

Minority shareholders are usually members who hold less than 50% of the shares in a company that have voting rights attached, meaning that they cannot block ordinary resolutions or special resolutions or any other resolution that must be passed by a higher majority. Minority shareholders are therefore at risk of their views being unfairly disregarded.

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Joint venture shareholders’ agreement—checklist

Joint venture shareholders’ agreement—checklist Purpose of Checklist The purpose of this Checklist is to illustrate the sorts of considerations which need to be borne in mind, and on which instructions will need to be sought, when drafting a joint venture agreement (also known as a shareholders’ agreement) and articles of association for a joint venture company (JVC). It is for guidance only and is not exhaustive. This Checklist is prepared with the requirements of English law in mind and, although similar considerations are applicable in the case of an international joint venture agreement, it is important to recognise the limitations of this Checklist in the context of a foreign joint venture (JV) vehicle. For a Checklist on the preliminary considerations which need to be borne in mind, and on which instructions will need to be sought, when considering entry into a JV arrangement where the JV vehicle is to be a private company limited by shares, see Checklist: Corporate joint venture preliminary issues—checklist. See Precedents: Joint venture shareholders’ agreement—deadlock (50:50)...

Corporate real estate joint venture shareholders’ agreement—checklist

Corporate real estate joint venture shareholders’ agreement—checklist Purpose of checklist The purpose of this checklist is to illustrate the sorts of considerations which need to be borne in mind, and on which client instructions will need to be obtained, when drafting a joint venture agreement (JVA) and articles of association for a corporate real estate transaction. For additional key issues to consider generally when drafting a JVA, see Checklists: Joint venture preliminary issues—checklist and Joint venture shareholders’ agreement—checklist. See also Practice Note: Property Joint Ventures—general issues for a list of commercial issues that the joint venture parties will need to consider when forming a property joint venture (JV). Typically corporate real estate JVs involve a JV between parties that have the ability to source real estate (one party possibly owning and contributing to the joint venture company (JVC) the property which is to be developed), the ability to provide material capital to the JVC, the ability to provide or procure debt financing (in order to finance the development of the...

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Texas shoot out (sealed bids)—flowchart

Texas shoot out (sealed bids)—flowchart The Texas shoot out (sometimes called a Mexican shoot out, Tex Mex shoot out or sealed bids) procedure may be started by either shareholder (or the shareholder which did not cause the deadlock) serving notice on the other shareholder, requiring both shareholders to submit sealed bids for the shares of the other shareholder within a specified timescale. The shareholders will be obliged to complete a share transfer on the terms of the bid with the highest price per share. There are a number of variants to this procedure, including that the joint venture shareholders’ agreement may provide for bidding by auction. It would be more usual in a deadlock or 50:50 joint venture for either shareholder to be able to serve the notice starting the Texas shoot out procedure. In a majority/minority joint venture, the majority shareholder may

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Court procedure—reduction of capital—effect of the reduction

Court procedure—reduction of capital—effect of the reduction It is a fundamental rule of English company law that a limited company having a share capital must maintain that capital. Therefore, a company must not reduce its capital, except as prescribed by law. This capital maintenance rule is intended to protect a company’s creditors by ensuring that the assets representing the capital of a company remain available to them for future recourse. There are provisions in the Companies Act 2006 (CA 2006) governing how a limited company may reduce its capital. The restrictions in CA 2006 relating to reductions of capital do not apply to unlimited companies. For further information on this type of company, see Practice Note: Unlimited companies. The focus of this Practice Note is on reductions of capital in accordance with CA 2006, Pt 17, Ch 10, in particular, those carried out by a special resolution confirmed by court order (the court procedure) rather than those carried out by a special resolution supported by a solvency...

Setting up a corporate joint venture—initial considerations

Setting up a corporate joint venture—initial considerations Joint venture The term joint venture has no specific legal meaning under UK law. It is essentially a commercial arrangement between two or more parties who agree to pool their resources for the purpose of accomplishing an intended project (or other business activity) and share the resulting rewards. It describes many different types of situations that range from structural arrangements that create or change the economic control of a legal entity, such as joint venture companies or partnerships, to non-structural arrangements such as contractual joint projects and informal (undocumented) collaborations. A joint venture can be formed for one specific project, period or a continuing business relationship. Joint ventures are used in a variety of sectors. There are a variety of reasons why parties may consider forming a joint venture to pursue a project or business, such as: • they lack the necessary knowledge, expertise, technology, resources and/or funding • by sharing the requirement to provide funding, they thereby reduces the financial risk...

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Heads of terms—corporate joint venture

Heads of terms—corporate joint venture Date: [insert date] Subject to contract 1 Introduction 1.1 These heads of terms set out the principal terms and conditions upon, and subject to, which [insert name of first shareholder] (Party A) and [insert name of second shareholder] (Party B) are proposing to enter into a joint venture to [insert purpose of joint venture] (the Proposed Joint Venture). Each of Party A and Party B is a party and together they are the parties. 1.2 The terms in this document are not exhaustive and[, with the exception of paragraphs 7.2, 8, 9, 10, 11 and 12,] are subject to contract and not intended to be legally binding on the parties. Neither party to this document shall be legally bound to proceed with the Proposed Joint Venture unless and until a formal written joint venture agreement is entered into. 2 The joint venture Party A and Party B wish to enter into the Proposed Joint Venture to [insert purpose of joint venture and...

Declaration of interest form—procurement—general commercial organisation

Declaration of interest form—procurement—general commercial organisation Part 1 To be completed by any member of staff involved in any form of procurement for or on behalf of [Insert organisation’s name], including Executive Directors, interims, secondees, temporary staff and contractors—whether or not they have an interest to declare. 1 Your details Name (print): [Insert name] Job Title: [Insert job title] 2 Details of the procurement: Goods/services to be procured [Insert details] Potential suppliers/bidders/tenderers [Insert details] Estimated total contract value [Insert details] Budget holder [Insert details] Project initiation document (PID) number [Insert details] 3 Declaration and signature All staff must complete one of the following statements and return the form to: [insert person or department to receive forms, eg Finance Director or Legal Department]. Please tick to indicate which statement applies. EITHER 3.1 □ I have reviewed the Declaration of Interest Form in Part 2 and have no interests to declare. I will inform [Insert organisation’s name]’s [insert person or department] of any changes to the information...

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Does a bonus issue have to be carried out so that the shares are offered to all existing shareholders in a company or can a company choose which shareholders to allot bonus shares to?

Does a bonus issue have to be carried out so that the shares are offered to all existing shareholders in a company or can a company choose which shareholders to allot bonus shares to? In this Q&A, we have assumed that the company proposing to carry out a bonus issue is a private company limited by shares. A bonus issue is the allotment of shares by a company to its existing shareholders, usually on the basis that they are fully-paid (as that is often a requirement of its articles of association), and without any payment being required by shareholders for those shares. In essence, a bonus issue will involve a resolution of a company to effect the capitalisation of existing reserves into (normally) fully-paid shares by allotting the shares and applying reserves in paying them up. It is not possible for a shareholder in a company that is making a bonus issue to refuse the allotment of any shares that they are entitled to or to...

What is an indirect (three-cornered) dividend demerger?

What is an indirect (three-cornered) dividend demerger? Under the indirect or three-cornered (dividend) demerger structure, all the shares in the company being demerged are transferred to the newly-incorporated company (NewCo) whose shares would then be issued to the shareholders of the distributing company (A Ltd) in satisfaction of a dividend declared by A Ltd. In other words the distribution of value is still from A Ltd to its shareholders but is effected indirectly via NewCo. If a company is proposing to offer a dividend in specie, it must ensure that it is able to make a distribution in accordance with the provisions of Part 23 of the Companies Act 2006 ((CA 2006), (CA 2006, ss 829–853)), see Practice Notes: Dividends—the legal framework and Distributions on the statutory requirements. In addition, the company's articles of association should be checked to ensure that they permit such a dividend to be paid and a scrip dividend to be offered. They should also be checked for any requirements to obtain shareholder...

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Dispute Resolution weekly highlights—12 June 2025

This week's edition of Dispute Resolution weekly highlights includes: analysis of a number of key DR developments and key judicial decisions including the Civil Procedure Rule Committee minutes of 9 May 2025 and the Court of Appeal decision in Saxon Woods Investments Ltd v Costa (corporate disputes); dates for your diary; details of our most recently published content; and other information of general interest to dispute resolution practitioners.

Corporate weekly highlights—12 June 2025

This week's edition of Corporate weekly highlights includes publication of the FCA’s final rules for the PISCES sandbox to allow trading in private company shares, and a speech by the FCA’s Sarah Pritchard on modernising public markets and regulatory innovation. In addition, it also includes a number of cases involving (i) an application to convene a creditor meetings under Part 26 schemes of arrangement, (ii) the construction of shareholders’ agreements and non-financial unfair prejudice, (iii) the conversion of members’ voluntary liquidation to creditors’ voluntary liquidation, and (iv) the validity of statutory filings made without proper authority under a company’s articles and Companies Act 2006 (CA 2006).

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