Shareholders are granted a range of statutory and corporate rights, together with various legal remedies available to enforce and protect those rights. Understanding the remedies available is particularly important for minority shareholders, who lack control over the company's decision-making process and may consider that their interests have been adversely affected by acts or omissions by directors or majority shareholders.

1. Action to Challenge Shareholders' Resolutions

This is the most common and standard course of action available to shareholders: challenging a resolution adopted at a shareholders’ meeting on the grounds that there was a procedural defect in the meeting (such as improper notice, insufficient information being provided, or the failure to have a notary present when required), or that the resolution infringes the rights of minority shareholders (for example, through an abuse of majority power).

In principle, a dispute concerning a formal defect will generally involve more objective considerations, while a dispute based on abuse of position will be more complex and subject to greater judicial interpretation.

2. Individual Action for Directors' liability

The claim is brought against the director in respect of acts or omissions that have caused direct harm to the shareholder.

It should not be confused with an action brought on behalf of the company against directors for acts or omissions that have caused harm to the company itself.

This action must be brought by resolution of the shareholders' meeting. However, in certain specific circumstances, it may be brought by a shareholder holding at least 5% of the share capital, for example where the shareholder has requested that a shareholders' meeting be convened and such meeting has not been called within the statutory time limit.

It may happen that a shareholder initiates individual proceedings alleging that a director has caused personal harm, but the court dismisses the claim on the grounds that the appropriate course of action should have been an action brought on behalf of the company, since the director’s conduct caused harm to the company as a whole and the alleged damage suffered by the shareholder was merely indirect and resulted from the harm caused to the company itself.

3. Shareholder’s Right to separate from the Company due to Non-payment of Dividends

Through this action, a shareholder seeks to exercise their right to separate from the company and receive the fair value of their shares. This requires that a five-year period has elapsed during which the shareholder has formally challenged the insufficient distribution of dividends.

4. Request for Information (contracts, invoices, payroll records) or Request for an Independent Audit

Both shareholder rights may be enforced through legal proceedings if a formal prior request has been submitted to the company’s management and it fails to comply with the obligation to provide the requested information or to allow the audit.

5. Criminal proceedings for corporate offences

In addition to the strictly civil legal actions, a shareholder may file a criminal complaint concerning a potential offence committed by shareholders or by a director, including corporate offences, breaches of fiduciary duties, or misappropriation.

Conclusion

It should be noted that these proceedings may be complex, as evidenced by the fact that corporate disputes are generally handled by the commercial courts or commercial divisions, rather than the ordinary civil courts. These courts are presided over by judges with expertise in corporate law.

In conclusion, shareholders have access to various types of legal proceedings to enforce their rights, whether against other shareholders or against directors.
However, initiating such proceedings requires a preliminary analysis of the relevant facts in order to determine the course of action best suited to the circumstances and to the shareholder’s interests.

ANTONI FAIXÓ
Partner, Disputes

*This article does not constitute legal advice.