5 steps a shareholder / business owner can consider taking to correct corruption
1. Become informed: The old adage, “knowledge is power” still holds true; if you are armed with proper knowledge, your chances of identifying and curbing corruption are significantly greater.
To obtain the requisite knowledge it is important you attend and participate in annual shareholder meetings, board meetings, and/or other meetings where management is present and information is shared.
Finally, if you have a proper purpose, submit and conduct a records inspection upon the business.
2. Document wrongdoing: While attending the annual meeting and/or board meetings or while conducting a records inspection make sure to document – in writing – any red-flags, concerns, or other issues. Take notes, make copies, obtain audio recordings, keep e-mails and other documentation you receive from or relating to the business, etc…
3. Voice your concern: Once you have made the effort to attend the meetings, inspect the records, and/or talk with management you must express your concern(s). As the title of this article states, the squeaky owner get the grease. Put another way, the only way to get attention and make a change is to take action and express your position. Keep in mind, while it is important to understand the reasoning behind certain actions / issues, do not wait to express your concern until it is too late. For example, if a vote is taken and you fail to object or vote against a certain proposal or issue, you may be estopped (prevented) from contesting the action / issue in the future.
4. Propose alternative solutions / corrections: Proposing an alternative solution or correction to an issue may remedy your problem without further action. In the unfortunate event your proposal does not correct the problem, the simple fact that you proposed an alternative solution or correction will likely lend credibility and support to any future action you take – either within your business or through litigation.
5. Make a written demand: If you alone or you and others are being harmed by the action or inaction of corporate management, you may consider sending a written demand that the business take certain action(s). In many circumstances, before you can file a lawsuit or a complaint with the Court, you must make a demand upon the corporation.
Innovative Litigation, L.L.C., as owner and host of this site, and Matthew McKinney as the author (acting on behalf of and through Innovative Litigation, L.L.C.) cannot and does not warrant the accuracy or reliability of the information presented on or through this site. The law can and does change over time and the information contained herein may not reflect the most recent laws – whether statutory law, administrative law, case law, constitutional law, or otherwise. The information on this website does not constitute legal advice and readers should not rely on it to solve problems or other matters. Further, you should seek licensed counsel in the appropriate legal jurisdiction before taking any action. Any information provided on this site is presented “As Is” for your personal curiosity and enjoyment. It is not meant to be relied upon for legal advice, counsel, or for any other purposes. Such information does not take the place of a lawyer. Rules and laws differ by jurisdiction and the information contained within this website may not apply in your jurisdiction. The appearance of articles, listings, or ads, by or for professionals, on this site, does not constitute an endorsement. In all cases, you are responsible for determining the quality of services, information, and/or advice provided by professionals through, or as a consequence of, your use of this site. Neither liability nor responsibility shall arise to any person or entity with respect to loss or damage caused (or alleged to be caused), directly or indirectly, by information posted on this website, or by reason of contact with a professional listed on, or posting information to, this site. No attorney-client relationship is formed by viewing this website and practice is limited to jurisdiction where lawyers are admitted. The information furnished on the website is only general and not a substitute for personalized legal advice. Legal advice cannot be given without full consideration of all relevant information relating to the individual(s) situation. Laws can change daily and new laws may, and likely will, affect the accuracy of the information herein. The information herein may be outdated and replaced by new law.
If you are seeking representation, please read the following notice before sending an e-mail:
Sending an e-mail will not make you a client. Until an agreement regarding representation is reached with you, anything you send will not be confidential or privileged. Before representation can occur, a lawyer will first take you through the conflict of interest procedure and see that you are put in touch with the lawyer best suited to handle your matter.
If you proceed with an e-mail, you confirm that you have read and understood this notice.