Business Judgement of Majority Shareholder Rule in Context of Legal Nature of Non-public Commercial Corporation
Goal. In the article we research applicability of business judgement rule to actions of a majority shareholder taking in the account specificities of non-public commercial corporations. Analysis of application of the rule to a majority shareholder’s actions in view of non-public corporation’s legal nature was conducted only in the Peeples’ paper [13]. However, this analysis fails to take into the account ability of shareholders of corporations to apply informal sanctions against each other. The goal of this article is to supplement current understanding of legal nature of non-public corporation and to elaborate additional grounds for application of the rule. Inferences. In the article we confirm the conclusion that justification of application of the rule in non-public corporations has specificities derivative from the legal nature of such corporations. Besides that, we conclude that the rule’s application may depend upon ability of shareholders to deter opportunistic behavior by informal sanctions. Value. The article for the first time proves that the legal nature of non-public corporations depends not only upon trust between shareholders, but from their ability to apply informal sanctions as a mean of protection from opportunistic behavior of a counteragent. Given this, we suppose that the state’s role in protection of rights and interests of minority shareholders may be decreased.