| Summary: | 碩士 === 中原大學 === 財經法律研究所 === 98 === According to statistics, over one hundred thousand small businesses in Taiwan registered as Company Limited by Shares, whereas most of them have merits of close corporations. Shareholders holding minority interests in close corporations are at risk of unfair or oppressive treatment by the majority or controlling shareholders, to an extent well beyond that of their counterparts in public corporations. Largely due to the principle of centralized control or majority rule and the lack of a market exit, minority shareholders of close corporations are particularly vulnerable to abuse. Therefore, American jurisdictions afford protections to the close corporation minority investors from the improper exercise of majority control. Curiously, however, our Company Act provides little guidance on this issue. Besides introducing the statutory basis for close corporations, controlling shareholders, this thesis also addresses two general standards for shareholder oppression. The two overlap, both in concepts and in results, but display different perspectives. The more traditional "fiduciary duty" analysis posits that shareholders with sufficient ownership of shares to have control over corporate decision-making owe a duty to the minority to avoid overreaching. An alternate approach that is growing in acceptance is the "reasonable expectations" analysis, adopting the perspective of the minority shareholders. Under this approach, corporate decisions may be found oppressive because they violate the expectations that the minority reasonably maintained toward employment or remuneration. Moreover, this thesis addresses the prevention mechanism, shareholders’ agreements, which could be implemented to alleviate the threat resulting from centralized control or majority rule principle. As for remedies granted for oppression, especially elected or compulsory buyout is recommended. Thereby, critical issues concerned are the methodology of stock valuation for close corporations and whether "fair value" should include any discounts for minority status or lack of marketability of the shares. Finally, the last part of this thesis draws the conclusions about the framework of legal protection for the oppressed minority shareholders.
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