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- Jul 4, 2024
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- #1
Author: wetc
Sponsor: Milkcrack
Type: Act of Parliament
Preamble: This Act aims to establish and codify the rights and powers of shareholders, ensuring transparency, accountability, and fairness in corporate governance in Azalea.
1. Shareholder Rights and Protections
(a) Shareholders have the right to access accurate and timely financial information about the company in which they hold shares.
(i) Publicly traded companies must publish monthly financial reports detailing revenues, expenses, profits, and debts.
(ii) Shareholders of private companies may request a quarterly financial summary, which must be provided within 14 days of the request.
(b) For public companies, each share is worth one vote, and only one class of shares shall exist.
(c) Shareholders are not liable for company losses under any circumstances.
(d) Executives of the company are not personally liable for company losses unless they have been found to have engaged in fraud, gross negligence, or unlawful conduct.
2. Shareholder Meetings
(a) Public companies must hold a quarterly general meeting (QGM) to allow shareholders to:
(i) Review the company’s financial performance.
(ii) Elect or re-elect members of the Board of Directors.
(iii) Raise concerns or propose agenda items for consideration.
(b) Shareholders holding at least 25% of voting shares may request a special meeting of shareholders, provided they submit a written petition stating the purpose of the meeting.
(c) For public companies, at each QGM, the Board of Directors must be re-elected by a simple majority of voting shareholders.
3. Board of Directors
(a) All public companies will be required to have a Board of Directors.
(b) The Board of Directors shall be comprised of a minimum of three members.
(c) No more than a third of the board’s directors may consist of individuals actively involved with the company’s operations.
(d) The Board is responsible for approving or disapproving any sale or merger of the company by a simple majority vote of its members. Additionally, the board will control executive employment, compensation, and long-term strategic decisions. These responsibilities can be expanded in a company’s bylaws as long as the ones outlined here are not changed.
(e) Shareholders do not vote on the company's mergers, acquisitions, or sales; these decisions rest solely with the Board of Directors.
(f) Directors are not required to hold shares in the company to qualify for their position.
4. Protection Against Mismanagement
(a) Shareholders have the right to sue the company or its directors for mismanagement or breaches of fiduciary duty.
(b) A shareholder or group holding at least 33% of the company’s voting shares may initiate legal action on behalf of the company against the company’s board if they believe the Board of Directors has acted negligently or unlawfully.
5. Whistleblower Protections
(a) Shareholders who report fraudulent or illegal activities within the company are protected from retaliation by the company or its directors.
(b) Whistleblowers are entitled to anonymity unless disclosure is required by law.
6. Reporting and Transparency
(a) Publicly traded companies must file a quarterly report with the Ministry of Commerce, summarizing:
(i) Financial performance.
(ii) Board decisions on significant corporate matters.
(iii) Shareholder proposals and their outcomes.
(b) Companies failing to meet reporting requirements are subject to fines and potential suspension of trading.
Enactment: This Act comes into force immediately upon passage.
Sponsor: Milkcrack
Type: Act of Parliament
A
BILL
TO
Enhance Shareholder Protections
BILL
TO
Enhance Shareholder Protections
Preamble: This Act aims to establish and codify the rights and powers of shareholders, ensuring transparency, accountability, and fairness in corporate governance in Azalea.
1. Shareholder Rights and Protections
(a) Shareholders have the right to access accurate and timely financial information about the company in which they hold shares.
(i) Publicly traded companies must publish monthly financial reports detailing revenues, expenses, profits, and debts.
(ii) Shareholders of private companies may request a quarterly financial summary, which must be provided within 14 days of the request.
(b) For public companies, each share is worth one vote, and only one class of shares shall exist.
(c) Shareholders are not liable for company losses under any circumstances.
(d) Executives of the company are not personally liable for company losses unless they have been found to have engaged in fraud, gross negligence, or unlawful conduct.
2. Shareholder Meetings
(a) Public companies must hold a quarterly general meeting (QGM) to allow shareholders to:
(i) Review the company’s financial performance.
(ii) Elect or re-elect members of the Board of Directors.
(iii) Raise concerns or propose agenda items for consideration.
(b) Shareholders holding at least 25% of voting shares may request a special meeting of shareholders, provided they submit a written petition stating the purpose of the meeting.
(c) For public companies, at each QGM, the Board of Directors must be re-elected by a simple majority of voting shareholders.
3. Board of Directors
(a) All public companies will be required to have a Board of Directors.
(b) The Board of Directors shall be comprised of a minimum of three members.
(c) No more than a third of the board’s directors may consist of individuals actively involved with the company’s operations.
(d) The Board is responsible for approving or disapproving any sale or merger of the company by a simple majority vote of its members. Additionally, the board will control executive employment, compensation, and long-term strategic decisions. These responsibilities can be expanded in a company’s bylaws as long as the ones outlined here are not changed.
(e) Shareholders do not vote on the company's mergers, acquisitions, or sales; these decisions rest solely with the Board of Directors.
(f) Directors are not required to hold shares in the company to qualify for their position.
4. Protection Against Mismanagement
(a) Shareholders have the right to sue the company or its directors for mismanagement or breaches of fiduciary duty.
(b) A shareholder or group holding at least 33% of the company’s voting shares may initiate legal action on behalf of the company against the company’s board if they believe the Board of Directors has acted negligently or unlawfully.
5. Whistleblower Protections
(a) Shareholders who report fraudulent or illegal activities within the company are protected from retaliation by the company or its directors.
(b) Whistleblowers are entitled to anonymity unless disclosure is required by law.
6. Reporting and Transparency
(a) Publicly traded companies must file a quarterly report with the Ministry of Commerce, summarizing:
(i) Financial performance.
(ii) Board decisions on significant corporate matters.
(iii) Shareholder proposals and their outcomes.
(b) Companies failing to meet reporting requirements are subject to fines and potential suspension of trading.
Enactment: This Act comes into force immediately upon passage.
