In New Jersey, your power as a shareholder to control the governance of a corporation is based on your voting rights, which can be determined by reviewing the incorporation documents (namely, your certificate of incorporation and the by-laws).
Because New Jersey allows corporations to customize the relative rights, preferences and limitations of the shares of each class of stock issued by a corporation, just because you own 50% of the stock of a company does not mean that you have 50% of the voting rights. You could own 50% of the stock and have no voting rights. Similarly, you could own less than 50% of the stock and have a majority of the voting rights.
Also note that shareholders simply vote for a board of directors, who then make decisions regarding the governance of the corporation. As such, even if you have a majority of the voting rights, the structure of the corporation’s board of directors could be set up to deny you complete control over the governance of the corporation.
Spector & Ehrenworth, P.C. has extensive experience analyzing and advising shareholders regarding their rights with respect to the governance of corporations. Attorneys at the firm would be happy to discuss with you the specifics of your corporation and advise you with respect to your rights. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail email@example.com.
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