Role of shareholders

The role of members is not to manage the day to day operations of the company, but rather act as owners of the company. Members are able to exercise their powers and rights in general meeting.

For example, members in general meeting have the power to change the constitution, approve certain reductions of share capital, and remove a director (particularly in the case of a public company). The division of powers between directors and members is usually set out in the company's constitution.

Members also have a statutory right to propose resolutions, call meetings to consider those resolutions, and distribute statements at general meetings of the company.

There are also other rights and powers available to members such as bringing an action to prevent the majority from improperly exercising the votes (based on the fraud on the minority principle), initiating statutory derivative actions, and seeking a winding up of the company.

See Role of shareholders.