ABSTRACT

One of the effects of the epic decision of corporate personality decided in Salomon v. Salomon is such that companies are governed by the principle of majority rule. That is corporate decisions are taken by the majority of the owners of the company, only shareholders with a majority of voting shares makes decisions as the company. This is because though a company enjoys a distinct personality in the eyes of the law, it is however an abstraction that acts through its constitutional organs viz the Board of Directors, the general meeting and the managing director as the case may be. The General Meeting being the supreme body as it controls the board of directors through the appointment and removal of Directors. Decisions at the general meeting are taken by the majority of shareholders which can be by a simple majority. However, in order to prevent abuse by majority shareholders and also to safe guard the investments of minority Shareholders whose interest may not be protected, the principle of minority protection evolved. The rule originally developed as exception to the common law decision in the case of Foss v. Harbottle has been through variations and reforms in different common wealth jurisdictions. This paper examines the protections given to minority Shareholders in Nigeria and the United Kingdom and argues that there are similarities in the protection given to minority shareholders in the two jurisdictions. However, they are better protected in the United Kingdom especially in relation to the relief of derivative action and therefore recommends reform of the Nigerian company legislation.

Keywords: majority shareholers, minority shareholders, Nigeria, United Kingdom