ABSTRACT

TOPIC: PROTECTING MINORITY INTEREST

BY *KAMAKSHI JOSHI

**HARSHI ARORA

In the day-to-day working of a company, certain decisions need to be taken regarding the
management of the company and these decisions are generally taken by the majority members.
In this process of decision-making, there may arise certain occasions wherein the interests of the
majority shareholders may come in conflict with that of the minority shareholders. In such a
case, if the decisions taken, are not in the larger interest of the company as a whole, but only
caters to the interest of one particular group, the minority group whose interest may have been
violated can raise its voice against such an action.

The protection of minority shareholders within the domain of corporate activity constitutes one
of the most difficult problems facing modern company law. The aim must be to strike a balance
between the effective control of the company and the interest of the small individual
shareholders.

It is only right to expect that in matters of a company, any decisions that are taken are done so in
keeping with principles of natural justice and fair play. In case of failure to do so, it is important
that the interest of minority shareholders be protected. In the present research paper, the
objective of the researcher is to look into the subject of the protection of the interest of minority
shareholders. In course of doing so, the researcher shall first examine the rule regarding majority
shareholders’ rights in detail that has been laid down by landmark judgments under Common
Law. The researcher will then look into the rule regarding the minority rights and the exceptions
to the majority rule. The researcher shall also examine the statutory protection that the minority
shareholders have under the Indian Companies Act of 1956.

KEYWORDS - management, minority ,shareholders, protection , rights