If you are a shareholder in a company, it is important to know your rights. Otherwise, you could be taken advantage of and miss out on opportunities for more profit or benefit from your investment position. One of the key concepts you need to understand is shareholder oppression.
What is Shareholder Oppression?
When majority shareholders in a company take actions that prejudice the minority shareholders, this is considered oppression. This happens particularly often in closed corporations, where the shares are not open to the public market. This is because the majority shareholders have leverage in this situation due to the minority shareholders not being able to readily sell their shares and avoid the oppression. Because of this, there have been many laws implemented to help minority shareholders assert their rights and avoid mistreatment, even if their shares are not public.
NJ Specific Laws
In New Jersey, minority shareholders are given slightly different tools to fight back against injustices done to them by majority shareholders. For instance, they can receive a buyout, which allows them to be paid the value of their shares instead of remaining captive as a minority shareholder in a company that is not treating them well. They can also receive a portion of misappropriated funds in the form of back-pay. This is one of the advantages that New Jersey has over other states.
How to Deal With It
When it comes to being a shareholder, there are a lot of obstacles to navigate. You need to make sure that you are properly represented and that your minority stake is not taken for granted. Don’t hesitate to get a business lawyer if you think you are being oppressed.
Spector & Ehrenworth, P.C. specializes in helping to get minority shareholders the justice they deserve in New Jersey. With their deep knowledge of these cases in New Jersey, they can help you by going step-by-step through your case and determining what kind of litigation you should pursue in order to receive compensation for your oppression.
The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by jurisdiction, and the information on this blog may not apply to every reader. You should not take, or refrain from taking, any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Spector & Ehrenworth, P.C.