Chapter 2: Rights and
Obligations of Shareholders
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183. The rights and obligations of a shareholder
shall be as laid down in this Law, in the articles of association of the company
or under any other law.
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Rights and obligations of shareholder
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184. Shareholders shall have the right to inspect
the following documents of the company:
(1) minutes of general
meetings, referred to in section 90;
(2) the register of
shareholders and the register of substantial shareholders, as referred to in
section 129;
(3) any document held by
the company, as provided in section 185;
(4) the articles of
association of the company, referred to in section 187;
(5) any document which
the company is required to file under this Law and under any law with the
Companies Registry or the Securities Authority, available for public inspection
at the Companies Registry or the Securities Authority, as the case may be.
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Rights to information
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185. (a) A shareholder shall be entitled to require
from the company inspection of any document in its possession, indicating for
what purpose, in any of the following instances:
(1) the document relates
to an act or transaction requiring the consent of the general meeting under the
provisions of sections 255 and 268 to 275;
(2) in a private company,
if needed for passing a resolution regarding a matter that is on the agenda of
the company’s general meeting.
(b) The company may
refuse the request of the shareholder if in its opinion the request was not made
in good faith or the documents requested contain a commercial secret or a
patent, or disclosure of the documents could prejudice the good of the company
in some other way.
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Inspection of company documents
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186. (a) The board of directors of a company shall,
on the demand of one or more shareholders holding at least ten percent of the
voting power in the company, be obliged to provide such person with a statement
verified by the company’s auditor, containing full details of all payments made
by the company to each of the directors and of the obligations to pay that the
company has taken upon itself, including conditions for retirement in respect of
each of the last three years in which the company has prepared financial
statements; the amount shall also include payments received by a director for
being an office holder in a subsidiary of the company.
(b) Where the board of
directors finds that the demand is not made in good faith, it may refuse to
comply therewith.
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Information on directors’ remuneration
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187. (a) Every shareholder shall be entitled to
receive from the company, at his request, a copy of the articles of association
and, in a private company, a copy of the financial reports referred to in
section 173(d).
(b) The Minister may
prescribe the entitlement of a shareholder in a public company to receive from
the company a copy of the financial reports.
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Right to receive articles of association and
financial reports
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188. Every
shareholder shall be entitled to participate in the general meeting and
to vote thereat, subject to the provisions of the articles of
association regarding voting rights attached to any share.
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Right to vote |
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189. Shareholders may conclude voting agreements
between themselves, subject to the duties imposed upon them under this Law.
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Permission to conclude agreements
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190. Every shareholder shall be entitled to receive a dividend, in
accordance with the rights attached to each share, if a resolution as
provided in section 306 regarding payment of a dividend has been passed.
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Right to dividend |
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191. (a) Where the company’s business is run in a
way that constitutes discrimination against all or some of its shareholders, or
in a way that gives rise to a real apprehension that the company’s business will
be run in such a way, the court may, at the request of a shareholder, give such
instructions at it sees fit to remove or prevent such discrimination, including
instructions for running the company’s business in the future, or instructions
to the shareholders of the company under which either they or the company itself
is to purchase its shares, subject to the provisions of section 301.
(b) Where the court rules
as provided in subsection (a), appropriate alterations shall be made in the
company’s articles of association and in its resolutions, as the court may
determine, and such alterations shall be considered to have been lawfully made
by the company; a copy of the resolution shall be sent to the Companies
Registrar, and if the company is a public company, to the Securities Authority.
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Rights in cases of discrimination
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192. (a) A shareholder shall act in exercising his
rights and in fulfilling his duties towards the company and towards other
shareholders with good faith and in a customary manner, and shall avoid
exploiting his power in the company,
inter alia, in voting at the general meeting or at class meetings, in the
following matters:
(1) alteration of the
articles of association;
(2) increase in the
registered share capital;
(3) merger;
(4) approval of acts and
transactions requiring the approval of the general meeting pursuant to the
provisions of sections 255 and 268 to 275;
(b) A shareholder shall
avoid discriminating against other shareholders.
(c) The laws applying to
breach of contract shall apply, mutatis mutandis, to breach of the
provisions of subsections (a) and (b), and the provisions of section 191 shall
also apply,
mutatis mutandis, to breach of the provisions of subsection (b).
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Shareholders’ duties
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193. (a) The duty to act fairly towards the company
shall apply to the following:
(1) a holder of control
in the company;
(2) a shareholder who
knows that the manner in which he votes will be decisive in respect of a
resolution of the general meeting or of a class meeting of the company;
(3) a shareholder who,
pursuant to the provisions of the articles of association, has the power to
appoint or to prevent the appointment of an office holder in the company or any
other power vis-a-vis the company.
(b) Breach of the duty of
fairness shall be treated as a breach of the fiduciary duty of an office holder,
mutatis mutandis.
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Duty of interested party and of decisive voting
power to act fairly
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