To de Tocqueville, that is a burden of democracy. Limitless influence is dangerous because utter control is the origin of oppression. If a people are mistreated, the only place to turn is the majority.
These foibles of democratic institutions are no less so in corporate governance. Here, we critically analyze the following statement: If the majority are abusing their powers and are depriving the minority of their rights, the minority is entitled to maintain their rights.2 MacDougall v Gardiner clarified the principles of majority rule. If the grievance of a minority is about something to which the majority of the company has privilege or has done unevenly a meeting may be called, and the majority ultimately gets what it wants. Over the years, the principle of majority rule has become more inclusive, however. We recount some of the more representative policies to make our assessment of the historic nature of the question at hand.
A place to start is the generally accepted structure of corporate membership. Members of a corporation have rights against each other and against the business as outlined the company's charter.3 As such minority shareholders usually accept they cannot command the overall control of the organization and must accept the will of the majority rule. Majority rule can be wicked especially when there is a single controlling shareholder. Many exceptions have developed relative to the broad standard of majority rule. Here are some of the more common:
Where the majority votes to carry out deception against the minority, judges may allow the minority to sue.
Everyone maintains the right to file suit if the majority invades personal rights or, for example, where the company's dealings are not accordance with the company's foundation.
It is possible for minority shareholders to secede in the name of the business when the company is controlled by the supposed wrongdoers.4
In these matters of rights and ethics, the court is supposed to favor the minority.
Court involvement in corporate voting has been minimized over the years though. Corporate law has focused on progressive minority protection and shareholders action, but a majority cannot force a dissentient minority to do that which is not allowed by the charter.5 It must allow the minority to express their opinions on the matter of the meeting, but the minority cannot, irrationally hinder the resolve of the popular vote by filibuster, for example.6 The minority has no right against the majority with respect to actions of which they do not support if the majority is allowed to do them.7 This standard applies where something has been done irregularly which the majority is at liberty to do regularly.8 Nevertheless, the minority may still sue when the majority is abusing power and depriving the minority their rights.9 Again, the court favors the majority while bolstering minority power when there is an ethical question.
An example is recounted here. In some proceedings brought by shareholders, claimants have no greater right to relief than the company if rolls were reversed and cannot complain of valid acts done with support of the majority.10 As such, directors are not restrained from making or enforcing calls in good faith. This applies for the use of proceeds or cancelling unissued shares,