Australia: Shareholders

Dividends are a common way for companies to distribute value to shareholders, but whether to declare or pay a dividend is not simply a commercial decision. Directors must ensure that any dividend complies with the Corporations Act 2001 (Cth) (Corporations Act), the company’s constitution and relevant governance requirements, while considering their duties to the company and its creditors.

If you hold at least 90% of the shares in a company, you can compulsorily acquire the remaining shares. A process known as compulsory acquisition. This framework allows you to access the benefits of full ownership, including streamlined decision-making, elimination of minority shareholder disputes, and complete control over corporate strategy. It also serves an important commercial purpose by facilitating corporate consolidation and removing the complexities of fragmented ownership structures. This article outlines the different ways compulsory acquisition of shares may occur and how each works.

Exposure to class actions remains a reality for businesses operating in Australia, and several emerging trends are set to influence that risk.