Company law Essay Example | Topics and Well Written Essays - 1500 words - 1

Company law - Essay Example Contemporary legal provisions have it that shareholders who are also known as the owners of the company have the advantage of not being disturbed by the various issues that the company may have with regard to the managerial process and also with regard to the manner in which it does in the forex market if the company is public1. It is important to recognize that this comes in as strength in the legal provision as the shareholders have the privilege of indulging in other activities that they may have. The legal provision however states that it is the rights of the shareholders to get information regarding the company upon their request in a bid to recognize or rather manage their investments2. The contemporary law however does not provide for certain factors that ought to come in as a major importance to the company. One of these factors is the amount of money that shareholders ought to get. According to the law, any company after making profits ought to put in some of the money to th e companies running for the purpose of acquiring new stock and other managerial tasks. However, shareholders ought to get a certain share of the company’s earnings in a rather precise manner. ... The power of the shareholders would increase from the fact that their investments would be brought back in terms of dividends3. Despite the various weaknesses identified in the law, there are strengths that it has with regard to class rights of the shareholder. One of the strengths is the fact that the shareholder has the right to apply for an appeal in the case of a variation being cancelled4. Variation identifies the contemporary strength of the company under review and the shareholders might get inclined to inquire about the state of the company through this method. Shareholders do this in an effort to identify how his contribution or rather investment is doing in case they seek to get dividends. It is the right of each shareholder to have this power and failure of the company to allow the shareholder to do this might get them seeking legal justice5. However, this only applies to people who hold above 15% of the company’s shares. This is because some shareholders might hold a very minimal amount of shares in the company and consequently make decisions that may affect the company’s running and best interest. There is strength in the legal system in the fact that it provides for the right of the shareholder to vote. There are many times that a company might get faced by very difficult decisions concerning the eligibility of some of the working conditions and market prices of their commodities. The law provides for the shareholders to engage with the management team of the company in that they can vote in a major decision making conquest. The law however does not suggest a clear approach with regard to the class right of a shareholder attending the meetings6. The law states that it is not always appropriate for the shareholders to attend all the