Where a minority shareholder does not agree with a fundamental transaction (i.e. one which will change the control of the company, such as a merger or acquisition, or dispose of its main business) which the majority of shareholders want, he/she can apply for appraisal rights. In effect, this forces the company to buy back his/her shares at a “fair value”. The concept of “dissenting shareholders” replaces and takes care of the previous Companies Act idea of a “fraud on the minority”. Obviously, the question of what exactly is the “fair value” of a minority shareholder’s shares can be difficult to quantify and so the courts may have to be involved.

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