Non-voting shares and the terms of divestiture and limitation of right to vote (Comparative study in Iran and English Law)

Document Type : Original Article

Authors

1 private law, Faculty of law and political science, Islamic Azad University, science and research branch, Tehran, Iran

2 Professor at Faculty of Law and Political Science, Allameh Tababa’i University , Tehran,Iran

Abstract

Abstract
The right to vote is among the most important share-dependent rights, which is created to the benefit of the shareholder once he owns the title to a share, allowing him to participate in decision-making activities of the company’s assemblies. In might be the case that a company’s financial policies dictate selling of new shares in order to raise its capital, however at the same time, the managerial exigencies might require the maintenance of the company’s extant supervisory structure. This, in the English legal system, has enabled companies to issue shares that have no right of vote, in addition to limits applicable to right of votes of the shareholder. In the Iranian legal system, due to a legal lacuna, issuance of shares with no right of vote by a company is prohibited. Only in cases such as non-performance of the shareholder’s obligation to pay the nominal value of shares per the terms of the amended version of the Commercial Act of 1968, can a shareholder be divested of his right to vote. Furthermore, companies can in some cases limit the right of vote of a share, for instance it could be provided in the company’s articles of association that the right to vote for a shareholder is contingent upon him having a specific number of shares.

Keywords

Main Subjects

References

  1. کتاب انگلیسی:

    1. Freeman, Mark , Pearson, Robin, Taylor ,James , Shareholder Democracies? Corporate Governance in Britain and Ireland before 1850, Chicago, University of Chicago Press,2011.
    2. Gaughan, Patrick A, Mergers, Acquisitions, and Corporate Restructurings, Hoboken, New Jersey, John Wiley & Sons publishers, 2007.
    3. Jonathan, Sutherland, Diane ,Canwell, Key Concepts in Business Practice, London, Palgrave Macmillan publishers, 2003.
    4. Nishwan, Bhatia, Jyotsna Seth, Corporate and compensation laws, India, PHI Learning Private Limited, 2012.
    5. Sanders, Michael,I, Joint Ventures Involving Tax-Exempt Organizations, Hoboken, New Jersey ,John Wiley & Sons publishers, 2013.

     

    مقاله انگلیسی:

    1. Sáez ,Maribel, Gutiérrez, María , “Dividend Policy with Controlling Shareholders”, Theoretical Inquiries in Law, volume 16.Issue1, (2015). 1-24
    2. Velasco,Julian, “The Fundamental Rights of the Shareholder”, Journal article 311, vol 40 U.C. Davis L. Rev,(2006). 1-61

    منبع الکترونیک:

    1. Braggion, Fabio. Giannetti, Mariassunta, At the Origins of the Non-Voting Shares’ Discount:Investor Preferences vs. Fundamentals, (2012), 1-43 Available at: https://pdfs.semanticscholar.org/a48e/53 (last visited on 07/03/2015)
    2. Brooks David, Depository trust Company and Omnibus proxy: Shareholder voting in the Era of Share. (2014), 205-237. Available at: https://trove.nla.gov.au/work/199225896 (last visited on 06/10/2017)
    3. Damodarn, Aswath, the value of Control: Implications for Control Premiums, Minority Discounts and Voting Share Differentials, (2005), 1-60 Available at: http://dx.doi.org/10.2139/ssrn.837405 (last visited on 06/09/2012)

     

     

     

Files

History

  • Receive Date: 08 March 2018
  • Revise Date: 10 August 2019
  • Accept Date: 14 November 2018

Share

How to cite

Statistics