Shareholder Rights And Protections: Ensuring Equity And Accountability In Corporate Entities

Gurnimratjeeet Kaur Gill, BA LLB (H), Amity Law School, Noida

ABSTRACT

This paper offers a comprehensive exploration of shareholder rights, corporate governance principles, and the impact of global best practices on safeguarding shareholder interests in India. It begins by defining the role of shareholders, delineating their rights and responsibilities within a company, and distinguishing between majority and minority shareholders. Emphasis is placed on the differing levels of influence and decision-making power vested in each category of shareholder. The document details the specific entitlements accorded to shareholders under Indian company law, encompassing crucial aspects such as director appointments, legal actions against directors, appointment of auditors, voting rights, and access to company records. These rights serve as pillars empowering shareholders to actively engage in company decisions, ensuring transparency and accountability.

Furthermore, it delves into India's regulatory framework, highlighting the roles of regulatory bodies like the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India (SEBI). It discusses the pivotal role of SEBI's Clause 49 and initiatives like the National Foundation for Corporate Governance (NFCG) in monitoring and enhancing corporate governance standards. The paper conducts a comparative analysis of shareholder rights across diverse international landscapes, including the United States, the United Kingdom, Germany, Japan, and India. It underscores the influence of global best practices on Indian corporate governance, leading to reforms focused on transparency, independent directorship, and stringent regulatory oversight to protect shareholder interests. The impact of embracing international standards in India, the drive for increased transparency in financial reporting, the pivotal role of independent directors, and the reinforcement of regulatory oversight are highlighted as pivotal outcomes influenced by global best practices. These reforms serve to align India's corporate governance with international standards, aiming to fortify shareholder interests and ensure effective governance.