Restrictions and Conditions of Minority Derivative Litigation in British and Roman-German Law: Proposed law, procedure and amendments

Abstract

The shareholders of a company entrust the day-to-day management of the company to a group of managers. In order to maintain the value of their shares and their right to receive dividends, shareholders maintain certain tools to influence the shares. They are usually influenced by expressing their opinions and obtaining votes in the general meetings of shareholders. However, there are other tools of influence, one of which is derivative litigation. This is a lawsuit filed against the directors by the minority shareholders on behalf of the company. In cases where the company has suffered damages due to the manager's misconduct, the company has the right to take action against the manager, but is usually reluctant to do so. Derivative litigation enables shareholders to take legal action against delinquent managers.Common law, Roman Germanic systems and Iran have adopted different approaches to protect minority shareholders. But the common law system acted more flexible and more complete in this case. Implementation of the common law rules in the Roman Germanic countries demand some conditions that must be included in Roman Germanic law. The gradual process of regulatory reform in Iran, the possibility of litigation derived expanded and some of the rules and regulations need to be revised again. This article offers a comparative approach to the legislator.

Keywords

• derivative claims
• rights of minority shareholders
• common law system
• the roman germanic system
• iran