In the contemporary Australian economy there is an enormous debate over the the rights of shareholders in relation to public and private companies. In formal terms, under the Corporations Act 2001 (Cth), a shareholder has an ownership stake in the company and the right to vote at general meetings. The number of shares that a shareholder has determines that number of votes that they may cast at a general meeting. At a general meeting, issues like the appointment of directors, voting on company resolutions and other important decisions will be made which will require a vote to be taken.

However, beyond this very basic right there are also obligations on the directors of companies which operate as a right in favor of the shareholders of the company. For instance, there is a legal obligation on the directors of a company to act in the best interests of the company as a whole. This includes to a very large extent running the company in the interests of shareholders. In large public companies, where the ability of the company to continue to operation is often dependent on the confidence of the investing public, it is very important for a public company to pay dividends to shareholders to ensure that shareholders do not feel that their rights as an investor are being curtailed. The boards of large companies also have numerous continuous disclosure obligations which mean that they must accurately report to the market about how profitable the company is, what its overall financial position is and allow investors to make good decisions about how to invest in particular companies. Investors often discover that learning how trading shares is important for their overall financial knowledge and success. This collection of legal obligations on directors and boards of both public and private companies are important protections on the rights of shareholders in both public and private companies. If you have a query about your rights as a shareholder or the rights of someone else as a shareholder please do not hesitate to contact us.