Your Rights as a Business Owner in a Company Limited by Shares

It can be a scary transition from sole proprietorship to a company limited by shares. Knowing your rights can help ease the discomfort in the transition.

Here is a list of things you, as business owner, are entitled (and we used this term loosely) to:

i) To receive, inspect question information that you may not understand or that which is ambiguous.

ii) To inspect the minute books, the Register of Members at an agreed office and within the agreed times.

iii) To refuse the transfer of any shares to a third party, to which you are not agreeable, and in accordance with the Articles of Association.

iv) To attend and vote at meetings, subject to the Articles of Association.

v) To receive dividends paid out of profits earned on an annual basis or as you may have agreed with other shareholders at an Annual General Meeting.

vi) On winding up and after all the liabilities have been paid, to receive a proportionate amount of the remaining capital in a proportion equal to the amount that you contributed at inception.

vi) To proceed to the courts of law, in the event that other shareholders have not considered your thoughts on a decision that is made in relation to the affairs of the Company.

vii) To apply to the Registrar to investigate any company affairs, which you believe were oppressive and non-representative of your views.

viii) To call an extraordinary meeting where you wish to discuss business of the Company that you believe may not have been considered appropriately. You however should have a minimum of 10% of the total share capital (Double check this with the section on EGMs)

Do not be scared to exercise your rights. When it is all said and done; remember that though your company has taken on shareholders, your business will forever be a part of your legacy.

We hope this helps.

Cheers!