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It is not "their" company, however. The company belongs to all the shareholders.

by beejiu 10y ago

splintercell 10y ago
It depends, if I start a company and offer a share contract where I am the BDFL(Benevolent Dictator For Life) of the company, then any shareholder purchasing the stocks is buying it by agreeing to that term. Sure the shares will not reach as high of a valuation as they would if shares didn't come with this condition, but there is no claim whatsoever that somehow shareholders somehow gain more power over the company than what they agreed to when purchasing the shares.
- beejiu 10y ago
  I'm not a lawyer, but I strongly suspect you have a fiduciary duty to all shareholders. If you are director-shareholder, you cannot act in the interests of your shareholding alone. Also, the idea that you can put any condition into a contract is naive. Many such conditions are legally unenforceable because they are incompatible with the corporate law framework.
snowwrestler 10y ago
> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value is documented—courts side with directors the vast majority of the time. Shareholders seem to get this. They’ve tried to unseat directors through lawsuits just 24 times in large corporations over the past 20 years; they’ve succeeded only eight times. In short, directors are to a great extent autonomous. https://hbr.org/2010/04/the-myth-of-shareholder-capitalism https://hbr.org/2010/04/the-myth-of-shareholder-capitalism My non-expert view is that super shares for founders change less about the legal status of corporations than people think they do.

It is not "their" company, however. The company belongs to all the shareholders.

by beejiu 10y ago

It is not "their" company, however. The company belongs to all the shareholders.

It depends, if I start a company and offer a share contract where I am the BDFL(Benevolent Dictator For Life) of the company, then any shareholder purchasing the stocks is buying it by agreeing to that term. Sure the shares will not reach as high of a valuation as they would if shares didn't come with this condition, but there is no claim whatsoever that somehow shareholders somehow gain more power over the company than what they agreed to when purchasing the shares.

beejiu 10y ago
I'm not a lawyer, but I strongly suspect you have a fiduciary duty to all shareholders. If you are director-shareholder, you cannot act in the interests of your shareholding alone. Also, the idea that you can put any condition into a contract is naive. Many such conditions are legally unenforceable because they are incompatible with the corporate law framework.

snowwrestler 10y ago

> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value is documented—courts side with directors the vast majority of the time. Shareholders seem to get this. They’ve tried to unseat directors through lawsuits just 24 times in large corporations over the past 20 years; they’ve succeeded only eight times. In short, directors are to a great extent autonomous. https://hbr.org/2010/04/the-myth-of-shareholder-capitalism https://hbr.org/2010/04/the-myth-of-shareholder-capitalism My non-expert view is that super shares for founders change less about the legal status of corporations than people think they do.