Can a majority shareholder sell the whole company without telling a minority shareholder in advance?
Not properly, no. A sale of all or substantially all of a corporation's assets outside the ordinary course of business generally requires shareholder approval by special resolution, which means proper notice of the meeting where that vote happens has to go to all shareholders, including minority ones, not just the majority. Deliberately excluding a minority shareholder from that notice, or otherwise structuring the process to keep them in the dark, is exactly the kind of conduct Ontario's oppression remedy under the Business Corporations Act exists to address, since it allows a court to grant relief where a corporation's affairs are conducted in a way that unfairly disregards a shareholder's interests.
That said, "without telling them in advance" can mean different things — informal advance notice beyond the formal meeting notice isn't necessarily required, so a minority shareholder should look closely at whether the formal, legally required notice was actually given, not just whether they felt kept out of the loop. A minority shareholder who learns of a sale only after the fact should get legal advice quickly.
Key takeaways
- A properly authorized sale requires formal notice to all shareholders, including minority ones.
- Deliberately excluding a minority shareholder from notice can support an oppression claim.
- Feeling uninformed is not the same as being denied the legally required formal notice.
- Discovering a sale after the fact warrants prompt legal advice.