EQUITABLE LIMITATIONS ON STATUTORY OR CHARTER POWERS GIVEN TO MAJORITY STOCKHOLDERS

Authors

Norman D. Lattin, College of Law, The Ohio State University

Abstract

The object of this paper is to examine certain fundamental corporate changes which statutes or articles frequently authorize majority stockholders, or a certain proportion of all, to bring about, and to ascertain whether courts have looked simply to the literal wording of the authority and have sanctioned the action if in accord with the statute or whether they have implied equitable restrictions in spite of apparently unlimited authority in the statute or articles. How far, for example, have courts gone in the direction of the business man's idea that the corporation, after all, is a democratic affair, and that the majority interest should not only be able to determine the ordinary affairs of the business but also those which involve the life and death of the corporation, its transformation, its expansion, as well? What, if any, limitations have they placed upon the power of the majority, under modern statutes, to merge, consolidate, or sell all of the assets where the dissenting minority, upon complying with certain formal requirements, may be paid for their interest in the corporation and thus withdraw? At a time when statutes are being revamped to give more pliability and greater dispatch in carrying out necessary financial reorganization through one of several means, these are important questions.

Recommended Citation

Norman D. Lattin, EQUITABLE LIMITATIONS ON STATUTORY OR CHARTER POWERS GIVEN TO MAJORITY STOCKHOLDERS, 30 Mich. L. Rev. 645 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss5/2