4 ms·
If there's a single shareholder that wants profit instead of clean air from their share, they have grounds to sue (and win). LLCs aren't dictatorships of the ma
by jampekka 3y ago
If there's a single shareholder that wants profit instead of clean air from their share, they have grounds to sue (and win). LLCs aren't dictatorships of the majority, and definitely not of the CEO.
If every single shareholder agrees, then yes.
- triceratops 3y agoMinority shareholders who want clean air instead of more profit can also sue and win. Courts don't interpret fiduciary duty as literally profit; this is a common misconception. Management has to show they are acting in their their shareholders' reasonable best interests. In my made up example, clean air and profit are both in shareholders' best interests, and no reasonable court will rule against the company for going with either option. Profit is an easy, objective metric. Optimizing it enriches the management personally because they're paid in stock. Most people, thanks to generations of propaganda, have come to believe they're legally required to optimize solely for profit. Consequently there is little risk in doing that instead of something else.