1. ASSIGNMENT ON CORPORATE GOVERNANCE
TOPIC:- RIGHTS OF SHAREHOLDER IN
CORPORTE GOVERNANCE
SUBMITTED TO:
MR. DEEPANKAR SHARMA
SUBMITTED BY:
ANSHU KUMAR LL.M
CORPORATE LAW

2. TABLE OF CONTENTS
• RIGHT TO ATTEND GENERAL MEETING & VOTING
POWER ON MAJOR ISSUES.
• THE RIGHT TO TRANSFER OWNERSHIP.
• AN ENTITLEMENT TO DIVIDENDS.
• OPPORTUNITY TO INSPECT CORPORATES BOOKS
AND RECORDS.
• TO SUE FOR WRONGFUL ACTS.
• STATUTORY RIGHTS.
• RIGHTS IN ACCORDANCE WITH O.E.C.D
PRINCIPLES

3. RIGHT TO ATTEND MEETING & VOTING POWER ON MAJOR ISSUES.
Every share holder has a right to participate in the Annual general meeting This includes electing directors
and proposals for fundamental changes affecting the company such as mergers or liquidation. There are two
types of meeting Annual general meeting and extra ordinary meeting which are as follows.
ANNUAL GENERAL MEETING:-
Voting takes place at the company's annual meeting. If shareholder can't attend the meeting, he can do so by
proxy and mail his vote. At present the law rather oddly, does not prescribe the business which has to be
transacted at the A.G.M and in particular does not lay down that the annual directors report and the accounts
must be laid before the A.G.M or the directors due for the re election must be considered then. In fact, it is
normal for these matters to be taken at the A.G.M and for the shareholders to have an opportunity to question
the directors generally on the company business and financial position. This is the result of the practice,
however rather than of law a practice which is encouraged by the combined code. As to the timing of the
A.G.M the law currently states that a company shall in each year hold an annual general meeting specified as
such in the notices convening it and not more than 15 months must elapse between one annual general
meeting and the next.

4. EXTRA ORDINARY GENERAL MEETINGS
A company’s articles commonly provide that any meeting other than the A.G.M shall be called an
extraordinary general meeting and that it may be convened by the directors whenever they think fit. In
the absence of any further statutory requirement the articles would probably stop there, for the
management would like nothing better than to be able to call meetings when it suited them, but to be
under no obligation to do when it did not.
VOTING POWERS ON MAJOR ISSUES:-
Common stock shareholders in a publicly traded company have certain rights pertaining to their equity
investment, and among the more important of these is the right to vote on certain corporate matters.
Shareholders typically have the right to vote in elections for the board of directors and on proposed
corporate changes such as shifts of corporate aims and goals or fundamental structural changes.
Shareholders also have the right to vote on matters that directly affect their stock ownership, such as the
company doing a stock split or a proposed merger & acquisition , They may also have the right to vote on
executive compensation packages and other administrative issues.
Common stock ownership always carries voting rights, but the nature of the rights and the specific issues
shareholders are entitled to vote on can vary considerably from one company to another. Some companies
grant stockholders one vote per share, thus giving those shareholders with a greater investment in the
company a greater say in corporate decision-making. Alternately, each shareholder may have one vote,
regardless of how many shares of company stock he or she owns. A shareholder may elect to fill out the
form and mail in his or her votes on the issues rather than voting in person.

5. RIGHT TO TRANSFER OWNERSHIP:-
Right to transfer ownership means shareholders are allowed to trade their stock on an exchange.
The right to transfer ownership might seem unremarkable, but the liquidity provided by stock
exchanges is extremely important. Liquidity is one of the key factors that differentiates stocks
from an investment like real estate. If one owns a property, it can take months to convert that
investment into cash. Because stocks are so liquid, you can move your money into other places
almost immediately.

6. ENTITILEMENT TO DIVIDENDS:-
The share holders along with the right in assets of the company are entitled to receive the claim on
any profits in the form of dividends. Company has essentially two prospects regarding the profits,
either to re- invest in the company itself to increase the value of the company or to pay it in the form
of dividends which the common share holders have the right. The percentage of the profits to be paid
is decided by the board of directors.

7. OPPORTUINITY TO EXAMINE THE CORPORATE BOOKS & RECORDS:-
The shareholder has a right to inspect the register of members & register of debenture holders and
get extracts there from & to obtain the copies of memorandum and articles on request and payment
of the prescribed fee. Share holders have a important right to such as right to copies of
memorandum of association, right to inspect minutes of general meeting and can ask for extracts,
right to receive notice of general meetings, copies of annual reports.

8. TO SUE FOR WRONGFULL ACTS:-
Two types of lawsuits against directors may be brought by shareholders: shareholder class action
lawsuits and shareholder derivative lawsuits. The difference between the two is largely a difference in
form. In a shareholder class action lawsuit, a shareholder is appointed to represent a class of plaintiffs,
namely, the other shareholders of the corporation who have been harmed by the actions of the
defendant director. Shareholder class action lawsuits are particularly useful for action against
directors of large public companies that have thousands of shareholders. In a shareholder derivative
lawsuit, a shareholder represents the corporation itself, rather than its shareholders, and sues for a
wrong committed by the director against the corporation itself for which the corporation refuses to
seek redress, or "make right." Before filing a shareholder derivative lawsuit, the shareholder must first
demand that the corporation redress the injury, unless such a demand would be obviously futile. The
shareholder may sue the director on behalf of the corporation only if the corporation -- effectively, its
directors and officers -- refuse to redress the harm for which the lawsuit is to be filed.

9. STATUTORY RIGHTS:-
The provisions of the Companies Act provides the various rights to the shareholder which protect
the interest and promote the participation of the shareholder in the company. Moreover the
memorandum of articles of association of the company or the general law relating to the contract
Act also provides the equal protection of the shareholder which tends towards the long term
shareholder value and improve the quality of corporate governance. Some of the rights are as
follows:-
a)- To vote at all meetings.
b)- To requisition an extraordinary general meeting of the company or to be a party to joint
requisition.
c)- To receive notice of a general meeting.
d)- To elect directors thus to participate in the management through them.
e)- To apply to the Court for relief in case of oppression, mismanagement, winding -up of the
company and to have any variation of shareholders rights set aside.
f)- To transfer the shares subject to the provisions of the companies Act and articles of association.
g)- To sue the company for enforcing his right against the company in any appropriate capacity.
h)- To participate in the removal of directors by passing an ordinary resolution.

10. RIGHTS OF SHAREHOLDER IN ACCORDANCE WITH OECD PRINCIPLES:-
O.E.C.D Principles laid more emphasis on the participation of the shareholder in the corporate
governance, availability of information to the shareholder, more transparency in the working of
the companies, discloser about the degree of control over the equity ownership, equitable
treatment with the shareholders regardless of the minority or majority shareholder, discloser about
1)- financial and operating results of the company. 2)- company objectives. 3)- major share
ownership and voting rights.