Wick & Trautwein, LLC
Call Today
Local: 970-237-5694
Toll Free: 866-686-1410

Do shareholders get to vote on mergers?

Corporate entities have a number of obligations to shareholders. After all, these are the people that have invested in the company, and they usually didn't do so out of the goodness of their heart. They want to see a return on their investment, and are usually interested in the overall actions of a company.

Shareholders have an opportunity to vote on some matters with regard to a company, but do they have the option to vote if a company is going to merge with another or be acquired by another? There isn't a straightforward answer because whether or not a vote is required depends on a number of factors.

The SEC does require that shareholders be given an opportunity to vote on organizational change if a vote is required under state law or stock exchange rules. A vote might also be required by a standalone regulation or shareholder agreement, so each case is very specific.

When a vote is required, it is often required that shareholders for both organizations involve in the possible merger and acquisition activity be allowed to vote. Other votes might be required to determine certain actions within the M & A, and the companies will first have to identify which organization is deemed the acquiring entity. In some cases, the acquiring entity is simply the organization whose shareholders end up owning the most shares at the end of the merger.

M & A activity can be very complex, and it impacts business organizations, customers and shareholders. If you are a shareholder in a company that is planning such activity and you believe your rights as a shareholder are being threatened, you can consult an attorney to find out more about your options.

Source: Harvard Law School, "SEC Guidance on Voting During M&A Transactions," accessed May 13, 2016

No Comments

Leave a comment
Comment Information
  • Lead Counsel Rated | LC
  • BBB | Accredited Business
  • 10 Best 2017 Attorney | Client Satisfaction | American Institute Of Family Law Attorneys
  • Preeminent AV | LexisNexis Martindale-Hubbell | PeerReviewRated
  • Best's Client Recommended Insurance Attorneys Listed Over 25 Year
  • Expertise Best car accident Attorneys in fort collins 2018

Fort Collins Office
323 South College Avenue #3
Fort Collins, CO 80524

Toll Free: 866-686-1410
Phone: 970-237-5694
Fax: 970-482-8929
Fort Collins Law Office Map

Windsor Office
421 Main Street
Windsor, CO 80535

Toll Free: 866-686-1410
Windsor Law Office Map

Review Us
Providing You With The Information You Need To
Make The Right Choices For Your Future

We Take Your Emails Seriously

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy