{"id":348,"date":"2007-12-04T00:00:00","date_gmt":"2007-12-04T00:00:00","guid":{"rendered":"https:\/\/norrismclaughlin.com\/sdnj\/2007\/12\/04\/fifty-percent-shareholders-have-rights-too\/"},"modified":"2007-12-04T00:00:00","modified_gmt":"2007-12-04T00:00:00","slug":"fifty-percent-shareholders-have-rights-too","status":"publish","type":"post","link":"https:\/\/norrismclaughlin.com\/sdnj\/50-50-shareholder-issues\/fifty-percent-shareholders-have-rights-too\/","title":{"rendered":"Fifty Percent Shareholders Have Rights Too"},"content":{"rendered":"<p>When a minority shareholder has a dispute with his or her business partner, the aggrieved shareholder often intuitively knows that there must be some legal protection for someone in his situation.\u00a0 He may not know the details \u2013 that there is a specific statute that provides protection for someone in just his position \u2013 but common sense may lead him to at least suspect that a competent <a title=\"Lawyers Through NMM Law\" href=\"https:\/\/norrismclaughlin.com\/sdnj\/218\" target=\"_blank\" rel=\"noopener\">lawyer<\/a> might be able to obtain some relief for him.<\/p>\n<p>The case of two 50% shareholders is a different animal altogether, at least with respect to a business owner\u2019s expectations.\u00a0 Often a shareholder who owns half the company has far less than half the power, simply as a result of the way the company has historically operated.\u00a0 However, fifty percent shareholders often believe they have fewer rights and remedies than do minority shareholders because of the assumption that the law would not favor them over a co-equal shareholder.\u00a0 That assumption is often incorrect.<\/p>\n<p><!--more--><\/p>\n<p>There is ample case law in New Jersey holding that, under the right circumstances, a 50% shareholder may be considered an \u201coppressed minority shareholder\u201d under New Jersey law, and that such a person may be entitled to the same rights and remedies as a 10% shareholder (for example) who is being mistreated by the majority.<\/p>\n<p>A circumstance in which this frequently occurs is that of a \u201cpassive\u201d shareholder who has no real involvement in business operations.\u00a0 It happens equally often where one 50% shareholder has sole access to the money and makes the financial decisions that impact upon the company.\u00a0 A 50% shareholder who is \u201cfrozen out\u201d of the company\u2019s finances may be treated as a minority shareholder and be able to force a buy-out, or obtain any of the other equitable remedies designed to protect minority shareholders.<\/p>\n<p>The crucial point to remember is that the goal of the statute is to provide protection to shareholders who are not in a position to protect themselves, regardless of their ownership status.\u00a0 If a shareholder is taking advantage of his position by denying his (on paper) \u201cco-equal\u201d business partner money, control, or even just information, the law may protect even a 50% owner.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When a minority shareholder has a dispute with his or her business partner, the aggrieved shareholder often intuitively knows that there must be some legal protection for someone in his situation.\u00a0 He may not know the details \u2013 that there is a specific statute that provides protection for someone in just his position \u2013 but [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"coauthors":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.1 (Yoast SEO v22.1) - 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