Shareholders of a Pte Ltd holding company are only liable for the amount they invested in that company as share capital. For that amount they invested, they enjoy partial or full ownership in the holding company and enjoy certain rights depending on the type of shares (i.e ordinary or preference) they own.
Hence shareholder rights are protected because;
- Directors of the holding company must comply with regulations in the constitution of the company
- They receive financial reports and other information
- They inspect minutes of general meetings of that holding company
- Ultra vires (acts that are completed without necessary legal authority) and illegal acts are restrained
- They vote on major corporate matters such as alteration of the constitution
- They receive dividends declared by the company
- They attend, speak and vote at general meetings
- They receive annual financial statements, reports and other information about the company
- They are legally required to be treated fairly by the directors of the company
- They are entitled to a return of the share of the proceeds should the company go into liquidation
- They enjoy the rights promised under their share class
The default rule of the shareholders’ voting rights is one vote per share. However the voting rights are subject to the rights and restrictions attached to the class of shares and voting method. Ordinary shareholders typically have one vote per share, while Preference shareholders do not usually have voting rights.