Shareholder rights protection, especially for minority partners, is the foundation of healthy corporate governance. Small shareholders often feel vulnerable to the dominance of majority shareholders who control company management and decisions. However, the "Law on Entrepreneurs" of Georgia grants partners a wide range of rights, from receiving information to conducting special audits and convening meetings. The shareholder rights protection service on Legal.ge aims to ensure your voice is heard and your investment protected. Our lawyers help you use legal leverage to prevent share devaluation, dividend concealment, or other forms of oppression.
What Does Shareholder Rights Protection Service Cover?
Experts on Legal.ge offer proactive and reactive legal assistance:
- Ensuring Access to Information: Exercising the legal right to request financial documentation, contracts, and minutes.
- Convening Meetings: The right of 5% shareholders to convene an extraordinary meeting with a specific agenda (e.g., dismissal of a director).
- Appointing Special Audit: Appointing an independent auditor via court to check suspicious transactions.
- Share Buyout Request: The right to demand the company buy out your shares at a fair price if you disagree with a decision that materially infringes on your rights.
- Fighting Dilution: Exercising and protecting pre-emptive rights during capital increases.
Real-World Scenarios When You Need This Service
Rights protection is relevant in the following cases:
- Non-payment of Dividends: The company has profit, but majority shareholders decide not to distribute dividends to "starve" minority shareholders financially.
- Suspicious Transactions: You suspect the director is selling company assets cheaply to their relatives. A special audit is the way to reveal this.
- Capital Increase: Majority shareholders announce a capital increase to dilute your share percentage if you lack funds for additional contribution.
- Information Blockade: You are not invited to meetings or provided with annual reports.
Georgian Legal Framework and Regulations
Shareholder rights are protected by the Law on Entrepreneurs. The law defines thresholds for minority rights (e.g., the 5% threshold for convening a meeting). The Civil Code and Civil Procedure Code are also important. New legislation has strengthened minority protection mechanisms, including Mandatory Tender Offer and valuation rights. However, realizing these rights often requires court intervention or precise procedural steps, violation of which leads to loss of rights.
Service Process
The rights protection process on Legal.ge includes:
- Rights Audit: Determining exact rights based on your shareholding percentage and charter.
- Official Request: Sending a written request to the company (request for information, meeting convocation).
- Legal Response: In case of refusal, applying to the court (e.g., to appoint an audit).
- Negotiation: After strengthening positions, negotiating with majority shareholders for better conditions.
Why Choose Legal.ge?
Minority shareholders often think they have no leverage. Lawyers on Legal.ge will convince you otherwise. We know how to use the law to your advantage to force management and majority shareholders to respect your property. Do not give up your rights — protect them with professionals.
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