As a shareholder in a startup or an established company, you really ought to know your rights.Being aware of your rights is useful anytime, but especially if you're having problems, want to extract yourself from an uncomfortable situation, or simply want to make your voice heard.However, many shareholders are surprisingly unaware of their rights. Some imagine their rights are greater than they really are; while others imagine they have no rights at all.Please note that this article relates to shares you may hold in a private limited company (not one that is traded on the stock exchange, and not an LLP).SharesYou have the right to receive a share certificate within two months, whether you're being issued with new shares or they are being transferred from a previous shareholder.You have the right for your name to be entered in the Register of Members (member is another name for shareholder).You are entitled to be offered first refusal for every new share that's issued, so your shareholding can't be diluted. If you take up the offer, you will maintain your percentage shareholding (assuming you have the money to do so at the time). This right can be set aside by a change in the Articles of Association or by a specific shareholder agreement.MeetingsYou have the right to be notified about any meeting of shareholders where key decisions are being made that affect how the company is run, such as a proposed change to the Articles.Unless you have specific non-voting shares, you have the right to attend meetings and place your vote, or to send someone else to vote on your behalf (in the latter case, there might be some formalities to go through first).In certain circumstances, you have the right to demand that a shareholder meeting is called (there are some minimum requirements). For example, you might want to present a draft resolution, or circulate something else to the other shareholders.DocumentsYou have the right to be sent copies of certain documents on request. These include:Certificate of IncorporationCompany ArticlesMost recent annual accountsFilings at Companies HouseCertain court ordersYou also have the right to inspect other important documents - this right is quite interesting, especially if you're having problems with the company and finding it difficult to obtain information.The documents the company should make available for your inspection include:Set of registers: Shareholders, directors, company secretaries, charges/mortgagesArrangements for directors: service contracts, any loan agreementsThese documents can give you an awful lot of information about what's happening with the company, and it becomes difficult for the company to keep things hidden from you.For further help with these rights or any shareholder matters, please give us a call.
