SHARE HOLDERS RIGHT TO PARTICIPATE IN THE MANAGEMENT

OF THE COMPANY

INTRODUCTION:
In the present world corporate governance has become a sensible measure for the long term
success of the company. There has been great interest in corporate governance because
developing good corporate governance is essential to restore economic vitality and fostering
sustainable economic growth and development.
For shareholders, effective Corporate Governance structures have become important criteria
for selecting the companies in which they wish to invest when making positive investment
decisions. As the investors are interested in long term benefits therefore they have now
started to analyze the corporate governance structure of the companies. The investors have
now started comparing the various companies that which company has implemented the
various recommendations regarding corporate governance as mentioned in various important
codes.
The important purpose of corporate governance is to safeguard the shareholders rights in the
company and also to pay special attention that there should be equal treatment with the
shareholder of same category. Corporate governance practices have emerged in free market
economies as a set of structural arrangements with a aim of developing a relationship
between the management of companies and the interests of its shareholders. Subsequently,
corporate governance concerns extended to the interest of other stakeholders and eventually
to society at large. Therefore a sound corporate governance system requires that shareholders
can actively participate in, and exert influence on, corporate strategic decision-making. The
two important principle of corporate governance can be elucidate as:
The first principle:
The corporate governance practices should give the shareholders a real opportunity to
exercise their rights connected with their participation in the company.
The second principle:
The corporate governance practices should ensure equal treatment of shareholders who own
the same number of shares of the same type (category).
The shareholders are the owner of the company and by virtue of this they have various rights
and obligation in a company. Some of the basic rights in the company are: ensuring adequate
methods of ownership registration, conveying or transferring shares, participating in the
companys profits, obtaining information on a timely basis, participating and voting in
general shareholder meetings. Along with these there are various other rights of the
shareholder and one of the most important among all these is the right to take part in the
management of the company. The most important channel for shareholders to influence how
the company has to run is to attend and vote at the general assembly meetings.

RESEARCH METHODOLGY:
This is a Doctrinal Research project and the relevant material for this project has been
collected from the primary as well as secondary sources. Doctrinal Research is a research as
we all know that it is based on the principles or the propositions made earlier. It is more
based on the sources like books of the library, and through various websites. At this point of
time it is pertinent to review the literature from where the relevant material has been
collected. For the purpose of the said Research Project the Researcher has collected the
relevant material from books on Companies Act 1996 and also from committee reports.

OBJECTIVE OF THE STUDY:

The following Aims and Objectives have been identified for this project.
1. To examine the rights of the shareholders given by the company
2. To examine how corporate governance is related to shareholders rights.
3. To examine the International Scenario of corporate governance related to
shareholders rights

STATEMENT OF PROBLEM:
Which rights are been given to the shareholders of the company and are the really exercised?

HYPOTHESIS:
In order to conduct a research work, some important hypotheses are to be formulated. The
focal points and assumptions are normally available through the formulation of
hypothesis. The major hypotheses developed on the basis of study of available
literature and evaluation of primary as well as secondary data and work done earlier
including related studies is that:
Shareholders are the real owners of the company and get a real opportunity to
exercise their rights connected with their participation in the company
 CHAPTERIZATION:
INTRODUCTION
SHAREHOLDER RIGHTS
INSTITUTIONAL SHAREHOLDERS
INTERNATIONAL SCENARIO
CONCLUSION AND SUGGESTIONS

REVIEW OF LITERATURE:
The shareholders are really the ultimate owner of the company. They bear all the risk of the
business and stand to gain the profits arising out of it. They have heavy risk on their
shoulders because if the business will have profit then they will also earn dividends but if the
business will incur losses than their money which is involved is also gone.
Shareholder has various rights in the company. One of the important rights among them is the
right to participate in the management of the company. Every shareholder has a right to take
part in the management of the company as by participating and voting in the annual general
meeting either personally or through proxies. Taking all the information about the
management of the is also an important right as possessed by the shareholder.

BIBLIOGRAPHY;
BOOKS:
Datey V.S., Student Guide to Corporate Law, (Taxmann Allied Service, 5th ed.,
2002).
WEBSITES:
http://www.iccwbo.org/CorpGov/shareholders.asp
http://www.oecd.org/dataoecd/54/18/1920683.pdf.