An Overview Of Shareholder Rights In Florida
Are you a minority shareholder of a company in Florida? If so, it is crucial that you know your rights under state law. Shareholder rights help to ensure that the best interests of minority shareholders are properly protected by majority stakeholders and the officers/directors of the company. In this blog post, our Miami shareholder dispute lawyers provide an overview of three key categories of shareholder rights in Florida.
Shareholder Inspection Rights in Florida
Under Florida law (Florida Statutes § 607.1602), minority shareholders have the right to inspect corporate records. To invoke inspection rights in Florida, a shareholder must make a proper demand to inspect corporate records at least five (5) days in advance. Through inspection records, minority shareholders can gain access to the following types of corporate records:
- Fundamental Corporate Records: Fundamental corporate records include things like the articles of incorporation, corporate bylaws, all applicable amendments to articles/bylaws, minutes of shareholder meetings, and basic identifying information for the company’s current officers and directors.
- Corporate Financial Records: In Florida, minority shareholders can also access and inspect certain financial records. In general, shareholders have a right to receive financial statements for the company within 120 days of the end of a fiscal year, unless good cause can be shown as to why doing so is impractical.
Shareholder Oppression Claims in Florida
In Florida, minority shareholders also have some protection against “oppression.” Broadly stated, shareholder oppression occurs when majority stakeholders of a company act in a manner that unfairly mistreats the interests of minority shareholders. Shareholder oppression claims are notoriously complex. What exactly constitutes shareholder oppression depends on many different factors. Some examples of conduct that could potentially be grounds for a minority shareholder oppression claim in Florida include:
- Denial of fair dividend payments;
- Forced sale by minority shareholders (squeeze out); and
- Payment of excessive compensation to majority shareholders.
Shareholder Derivative Actions in Florida
Finally, Florida law also provides shareholders with the right to file a shareholder derivative claim. Through a shareholder derivative action a minority shareholder can file a lawsuit on behalf of the corporation itself. In most cases, shareholder derivative claims are initiated because the company’s officers or directors declined to take legal action. Many derivative claims are filed against a corporate officer or corporate director. There are strict standards that must be followed to file a shareholder derivative lawsuit in Florida. If you have any specific questions about shareholder derivative actions, an experienced South Florida shareholder dispute lawyer can help.
Call Our Miami, FL Shareholder Rights Attorney for Immediate Help With Your Case
At Pike & Lustig, LLP, we are skilled, relentless advocates for shareholder rights. If you have any questions about shareholder inspection rights, shareholder oppression claims, or shareholder derivative actions, we are here to help. Give us a call now or connect with us directly online to set up your strictly confidential, no obligation appointment with an attorney. With offices in Miami-Dade County and Palm Beach County, we represent minority shareholders throughout South Florida.