Starting a Business

What Are My Rights as an Investor?

min read
Opinions expressed by Entrepreneur contributors are their own.
You're right. Just because you are a minority shareholder doesn't mean you don't have rights to have a say in what goes on in the company.

First, look carefully at your shareholders agreement -- assuming you have one. It should have provisions that talk about the voting rights that apply to significant business decisions such as staffing changes, determining signatories to the company's bank accounts and other management issues.

As a majority shareholder, your partner may well have the right, and enough votes, to make these changes, but not without following the proper procedures in your shareholders agreement and the state's corporate law.

However, if you don't have a written agreement, you'll want to give careful thought to whether you want to stay involved in this business. Litigation is your next likely step, and the cost of that could outweigh the value of your ownership interest. You'd be well served to speak to a local business attorney to get guidance on the cost of litigation and possibly negotiating a buyout of your interest.

Related: What to Do When Your Partnership Sours
Related: Shareholder Resolution - Voluntarily Liquidate [Form]

More from Entrepreneur

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.