2 White, New York Business Entities P B614.07

Summary

Shareholders, unlike directors, do not stand in a fiduciary relationship with each other and are not deemed to be in a position of trust with respect to the manner in which they vote their shares. Accordingly, in most circumstances, shareholders have a right to vote on all issues even though they may have a personal interest in the outcome of the vote, adverse to that of the corporation and other shareholders. This rule applies even though the interested shareholders own a majority of the shares and are in a position to determine the vote.1 If a shareholder holds shares in a fiduciary capacity or if he or she is a director of the corporation, special problems may arise, and the right to vote may be somewhat...