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What Can A Minority Shareholder Do If Their Rights Are Being Violated?


A minority shareholder of a closely-held Florida corporation must put their trust in the faith of the majority owners. By definition, minority shareholders have little direct influence over the day-to-day operations of the company. This raises an important question: Can minority shareholders take action to stop their rights from being violated? The answer is ‘yes’—but the options available will always depend on the specific circumstances. In this blog post, our West Palm Beach shareholder dispute attorneys highlight four key steps to take if you are a minority shareholder who is being mistreated.

Four Steps to Protect Your Rights as a Minority Shareholder in Florida

  1. Review the Shareholder Agreement and/or the Articles of Incorporation 

For minority shareholders involved in a dispute, the first place to look is always the governing documents of the company. Make sure you get a copy of any and all governing documents, including any shareholder agreement and the articles of incorporation. In Florida, these governing documents help to establish your rights. If you have any questions about your agreement, an experienced minority shareholder rights attorney can help. 

  1. Know Your Rights Under Florida Law 

Notably, minority shareholders have some statutory rights under Florida state law. For example,  under Florida Statutes § 607.1602, shareholders have a right to inspect certain corporate documents and records. You can exercise your shareholder inspection rights to ensure that you have all of the information you need about the operation of the business. 

  1. Consider Whether Your Strongest Claim is Direct or Derivative 

If you are going to take legal action, you need to determine what type of shareholder claim to bring against the majority stakeholders. There are actually two separate types of shareholder claims: 

  • Direct Shareholder Action: In a direct shareholder lawsuit, the minority shareholder is filing a personal claim on the grounds that their individual rights have been violated.
  • Derivative Shareholder Action: In a derivative shareholder lawsuit, a minority shareholder is taking action to file a lawsuit on behalf of the company on the grounds that the corporation itself suffered financial harm due to the misconduct of its officers or directors.

Whether it makes sense to file a direct shareholder lawsuit or a shareholder derivative lawsuit depends on the specific allegations. A lawyer can help you decide how to move forward with your case. 

  1. Consult With a Minority Shareholder Rights Attorney 

As a minority shareholder, you do not have to navigate a conflict alone. Florida’s shareholder laws are notoriously complex. Further, parsing the legalese in a shareholder agreement or a company’s article of incorporation can be challenging. An experienced Florida shareholder rights lawyer will review your case and help you figure out the best course of action. 

Schedule Your Confidential Initial Consultation Today

At Pike & Lustig, LLP, we are a boutique law firm focused on providing exceptional representation to clients. If you have any questions about minority shareholder rights, we can help. Call us today for your completely confidential consultation. From our legal offices in West Palm Beach, Miami, and Palm Beach Gardens, we represent clients throughout South Florida.

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