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Issues of company restructuring always require thorough preparation and study of the legal framework for its implementation. This requirement is especially relevant for the processes of selling a company. There are quite a few legal mechanisms and techniques for selling a company that can help organize this process, but this does not diminish the number of questions that may arise during the sale. One of the most frequently asked questions is can a majority shareholder sell the company. We suggest you learn a little more about majority shareholders to understand how extensive their rights and options are for selling a company.

Who are majority shareholders?

To begin with, you need to expand your knowledge a bit and find out who the majority shareholders are. Simply put, a majority shareholder is one of the owners of a company who controls more than 50% of the company. It does not matter the status of the owner – it can be an individual or a company, or it can be the government. Despite the large shareholding, the majority shareholder cannot be considered the sole owner of the company – when making decisions, he must take into account the opinion of other shareholders by voting at shareholders’ meetings. It is also a mistake to think that the owner or founder of a company is a majority shareholder – in practice, this does not happen very often.

Majority shareholders have a certain set of rights and privileges that determine their position:

• They have the final say in decision-making if consensus cannot be reached at meetings;
• They can initiate a shareholders’ meeting if there is a problem or if the company starts to develop in a different direction than the statute provides for;
• They can supervise the work of the board of shareholders and raise the issue of replacing members of the board who are not faithful in their duties;
• They are not responsible for the financial stability of the company – if there are difficulties with debts, the property of the majority shareholders outside the company cannot be used as a means of payment.

The presence of majority shareholders in the management structures of the company makes the management process more stable and resilient to external conditions.

Can a minority shareholder block a sale: basic conditions

In spite of the extensive rights of the majority shareholder, they cannot be the sole manager of the company, especially when it comes to restructuring the company through a sale. If the majority shareholder is interested in selling the company, the minority shareholders can block this decision at a vote. However, the majority shareholder is not the owner of the company, so he cannot make such decisions on his own.

In order to induce the minority shareholders to sell the company, the majority shareholder may resort to several methods:

• Buying out the minority shareholders’ rights at a fixed price or another set by the shareholders’ agreement;
• Convincing the minority to sell the company through negotiations, while making sure that the actions of the majority shareholder do not overstep the legal requirements.

If the sale of the company is a necessary measure at this stage of its development, it is worth finding methods to communicate the need to sell to all shareholders. Only then can the necessary agreement for the sale be achieved. All other methods can be calculated as exceeding the authority of the majority shareholder or the current legal norms about the operation of the joint-stock company.

Working with documentation is an integral part of the workflow of any company, regardless of its field of activity and profit margins. The modern document management process implies a lot of variants of its implementation. Some companies practice creating all documents from scratch, but more effective and useful for the working process is the use of ready-made templates that can be used as a basis. In this case, you can create ready-made templates individually for each company, according to its requirements and wishes, or you can buy standard samples. We suggest you learn a bit about creating board papers for decision and their further use in your work.

How does work with documents for decision begin?

Like any other process, working with documentation should start with preparation. This will also be useful for creating your own unique templates for documents, including – for decision making. This type of documentation is most often used in the work of the governing structures of the company – for example, the board of directors. Therefore, the documents used for this purpose should not only comply with the rules and requirements for document management but also meet the goals of the company’s development.

To create the most effective decision-making document template possible, we advise adhering to some simple recommendations:

• Determine a clear purpose for which the document template is needed;
• Draw up the structure of the template in advance;
• Discuss the draft of the future template with other board members, if necessary;
• Work not only on a standardized document structure but also on a digital alternative.

When creating a decision document template, remember that the contents of such documents are not always public, so take care of ways to digitally protect them.

What does a board decision template consist of?

Decision documents should comply not only with the company’s internal standards but also with general record-keeping requirements. These requirements are most often related to the structure of the documents. Try to ensure that your unique template includes the following components:

1. The introductory part, where you need to specify the name of the company, the purpose of the meeting or meeting, the date and time of the meeting, and other information of an organizational nature. You can leave blank space in the template for this data and fill it in as needed.
2. The main part. As a rule, all the essence of the decision and other important information is displayed here. This field in the template can be left empty because the contents will always be different – according to the decisions, which are rarely duplicated.
3. The final part. This part of the template is intended for formalizing organizational moments – for example, there can be a place for the signature of the management or specify additional information regarding the decision. Both paper and electronic copies should always have filled in fields of responsible persons with their positions and data, which will serve as a confirmation of the document’s legal force.

The template can also include a place for graphic data if the company’s activities provide for their use, or for various kinds of additional information – for example, recommendations, results, analytical data.

It is not necessary to forget that the template is only a sample that helps to facilitate the process of work with the documents, but it is not an independent tool and a guarantee of the success of the work of the company.