Although priority will generally be given to a corporation’s bylaws and shareholder vote, Missouri law has several safeguards that protect minority shareholders in closely held corporations. To give examples, if a shareholder can prove that the (1) directors or those in control of the corporation have acted, are acting, or will act illegally, oppressively, fraudulently or unfairly prejudicial to a shareholder or (2) that the directors/shareholders are deadlocked in corporate management thereby creating a risk of irreparable injury to the business, then the Court may order the following relief:
(1) The performance, prohibition, alteration, or setting aside of any action of the corporation or its shareholders, directors or officers or of any other party to the proceeding;
(2) The cancellation or alteration of any provision in the corporation’s articles of incorporation or bylaws;
(3) The removal from office of any director or officer;
(4) The appointment of any individual as a director/officer;
(5) An accounting with respect to matters in dispute;
(6) The appointment of a custodian to manage the corporation;
(7) The appointment of a provisional/interim director;
(8) The payment of dividends; or
(9) Damages to any aggrieved party.
From experience, Courts/Judges can be reluctant to order the foregoing for fear of injecting too much judicial influence into a private corporation. However, if the facts and circumstances are correct, a Judge can grant these requests to a shareholder. Note that this is not the only relief available to minority shareholders. While more difficult to obtain, a minority shareholder can request that the Court order a shareholder to purchase all of the corporation’s shares or that the corporation be dissolved.
Contact with questions pertaining to corporations, directors and shareholders.