Minority Rights and Lawsuits Filed by Shareholders of Companies in Public Joint Stock Companies Based on the Corporate Governance System in Iranian and French Law with Emphasis on the Principles of Ethics
Akhlāq-i zīstī i.e., Bioethics Journal,
Vol. 11 No. 1 (1400),
2 November 2021
,
Page 331-345
https://doi.org/10.22037/bioeth.v11i1.35822
Abstract
Background and Aim: In the management of joint stock companies based on the majority vote, the rights of the minority are less considered and in some cases, the managers of the company abuse their position. In this regard, it is necessary to provide solutions to support minority shareholders. The solutions for filing a lawsuit against the shareholders are in two general ways, including on the name and on behalf of the joint stock company and the other by the name and on behalf of the shareholder. Identifying several shortcomings in the binding legal regulations related to minority rights in Iranian law, especially in the areas of "financial disclosure and transparency", "voting system" and "derivative litigation" is among the objectives of the present study.
Materials and Methods: This research is of theoretical type and the research method is descriptive-analytical. The method of data collection is library and has been done by referring to documents, books and articles.
Ethical Considerations: None to be declared.
Findings: Filing a lawsuit against the shareholder in the name and on behalf of the company, which is the derivative lawsuit, is in order to properly manage the company and protect the joint stock company against violations that managers have committed in performing their duties to the company. Article 276 of the bill amended a part of the Commercial Code of 1347, which refers to the possibility of filing a derivative lawsuit, makes it possible to file a derivative lawsuit only against the persons mentioned in Article 276. As a second solution, the shareholder can file a lawsuit against any private or legal person, both from a legal and criminal point of view, unlike a derivative lawsuit, which can only be filed from a legal point of view.
Conclusion: In the laws of France and Iran, by relying on the ethical norms of business, shareholders can file a lawsuit on behalf of the company through a derivative lawsuit. Although it is possible to identify minimum rights for minority shareholders in joint-stock companies from checking some internal regulations, the silence of common laws, the lack of legal binding of some formalities and the lack of dynamics of judicial procedure in this regard have caused minority rights to be less noticed and sometimes be overshadowed by the misbehavior of managers and majority shareholders.
Please cite this article as: Papi H, Niknejad J. Minority Rights and Lawsuits Filed by Shareholders of Companies in Public Joint Stock Companies Based on the Corporate Governance System in Iranian and French Law with Emphasis on the Principles of Ethics. Bioethics Journal, Special Issue on Ethical & Legal Reflections 2021; 331-345.
- Minority Rights; Stock Company; Company Shareholders; Iranian Law; French Law
How to Cite
References
Chen W. A Comparative Study of Funding Shareholder Litigation. Singapore: Springer Publisher; 2017. p.1-3.
Taghipoor B, Sarmadi M, Abedini H. Minority Rights in Public Joint Stock Companies Based on the Corporate Governance System; A Comparative Study of Iranian and American Law. Journal of Islamic Law. 2019; 2(48): 369-396. [Persian]
Tafreshi M, Amirteymoori S, Nasiri M, Shahbazinia M. The Concept of Derivative Action and Its Exceptional Feature (A Comparative Study in English, American, French and Iranian Law). IQBQ. 2015; 18(4): 97-123. [Persian]
Partington M. Introduction to the English Legal System 2019-20. Oxford: Oxford University Press; 2019. p.16.
Cinelli L. Legal Positivism in a Global and Transnational Age. Dundee: Springer; 2019. p.90.
Lerman L, Schrag P, Gupta A. Ethical Problems in the Practice of Law. London: Wolters Kluwer Law & Business; 2021. p.1-5.
Calkoen W. Corporate Governance Review. New York: The Law Reviews; 2017. p.28-31.
Shams A. Civil Procedure. Tehran: Derak; 2012. Vol.1 p.281, 286, 324-325. [Persian]
Skini R. Business Law, Commercial Companies. Tehran: Samt Publications; 2012. Vol.2 p.14, 93, 175, 214-215. [Persian]
Pasban M. Law of Commercial Companies. Tehran: Samt Publications; 2010. p.34, 221. [Persian]
Zangeneh A. Business Law. Tehran: Al-Zahra University; 1967. p.121. [Persian]
Tehrani H. Business Law. Tehran: Publication of Justice; 1996. p.185, 193. [Persian]
Kanaani M. Minority Shareholder Rights in Joint Stock Companies. MA Dissertation. Tehran: Tarbiat Modares University; 1994. p.150. [Persian]
Boulle L. International Economic Law and African Development. London: Siber ink; 2014. p.24-25.
Tahmasebi A. Reflections on litigation derived from the perspective of jurisprudence. Two quarterly Journals of Civil Law Knowledge. 2015; 2(4): 11-22. [Persian]
Kalimo H. EU Economic Law in a Time of Crisis. London: Edward Elgar; 2016. p.5-6.
Gantenbein P. Corporate Governance and the Market Value of Shareholder Voting Rights. Basel: University of Basel; 2016. p.11-17.
Pettet B. Pettet's company law. London: Pearson Education; 2009. p.299.
Fanto J. The Role of Corporate Law in French Corporate Governance. London: Springer 1989. p.61-63.
- Abstract Viewed: 501 times
- PDF (فارسی) Downloaded: 164 times