Do You Know Your Rights As A Minority Shareholder?

At the Motley Fool, a message we often repeat is that investing in a listed company is more than just buying a stock ticker – we are buying a tiny portion of a business.

As part owners of a business, we have our rights, even if we are considered minority shareholders. Here are some of your rights as a minority shareholder of a Singapore-listed company.

Right to information

A company has to keep information of its shareholders, directors, and financials at its registered office. And as a shareholder, it is our right to have access to these documents.

A shareholder can inspect the registry for certain personal information and roles of the directors, secretaries, managers, and auditors. A shareholder can also ask for the directors’ shareholdings in the company and any other corporations (if there are).

Right to attend general meetings

All shareholders have the right to attend any general meeting of the company. They are also free to speak at the forum. In fact, a minority shareholder can even call for an extraordinary general meeting (EGM).

As long as there are two or more shareholders, with a combined stake of more than 10% of the company, they can call for an EGM without the prior approval of the board. Moreover, a shareholder can raise a resolution onto the agenda as long as

  • they hold more than 5% of the company or
  • 100 or more shareholders, each with an invested capital of more than S$500.00 in the company, had proposed the resolution as well.

Right to fair treatment

Lastly, a company should treat all its shareholders fairly. If a minority shareholder feels that he/she has been unfairly treated by the directors or the company, he/she has the right to seek assistance from the court. But, the shareholder has to understand that the cost of any legal battles need not be covered by the company.

Foolish Summary

It is a fact that not all listed companies would treat their minority shareholders fairly. We have seen from the S-Chip scandals in Singapore that minority shareholders can see their investments disappear because of mismanagement and/or outright fraud.

Therefore, it is important that we investors know our rights when we invest in a company. It may not be a complete list, but the above are just a few examples of the power that minority shareholders have in a company.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim does not own shares in any companies mentioned above.