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Majority Shareholder Fiduciary Duties

In Missouri, a common mis-perception is that only corporate officers and directors owe a fiduciary duty to the company and the company’s shareholders. There are, though, limitations on the rights of majority or dominant shareholders to act in their own self-interest. Specifically, shareholders in control — through majority ownership or otherwise — are under a fiduciary duty to refrain from using their control to obtain a profit for themselves at the injury or expense of the minority, or to produce corporate action of any type that is designed to operate unfairly to the minority. Long v. Norwood Hills Corporation, 380 S.W.2d 451, 476 (Mo. Ct. App. 1964). 

It goes without saying that what constitutes instituting a corporate action that is “designed to operate unfairly” is vague. Every case is going to be fact specific and very much depends on the circumstances. Note further that in more serious cases, such as where a corporate dissolution is requested based on shareholder misconduct, there must be serious, oppressive conduct that constitutes potential irreparable injury or imminent danger. Jesser v. Mayfair Hotel, 316 S.W.2d 465, 473 (Mo. 1958). 

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