The minority shareholder protection: the English rule of derivative action and Companies Act of Bangladesh

Abstract

The fundamental concept of the minority shareholder protection is the distinction between the personal rights of the shareholders and the rights of the company. A shareholder may have personal rights under an agreement to which he is a party in his personal capacity under the constitution of the company, may be protected by the course of personal action. However, if shareholder desires to enforce a right of the company not confer on him can only do so by means of the derivative claims. The most common form of derivative claim is the company’s property fraudulently misappropriate by the directors. The derivative claim is a claim brought by an individual shareholder in his own name, but on behalf of the company. The reason the claim takes this form is that the minority shareholder is not in a position to see the claim is brought in the name of the company itself to enforce the company’s rights. This paper examines the protection of the minority shareholders’ rights with reference to English rule of the derivative claim. This paper also concentrates on the current statutory position of Bangladesh in relation to minority shareholders’ protection and distinguishes it from the English rule.