What rights do minority shareholders have in an Ontario private corporation?

Minority shareholders in an Ontario private corporation have several protections under the Ontario Business Corporations Act, even without a shareholder agreement. The most important is the oppression remedy: a shareholder can apply to court if the company's affairs are being conducted in a manner that is unfairly prejudicial to, or unfairly disregards, their interests. Courts have broad powers to remedy oppressive conduct, including ordering a buyout.

Shareholders also have the right to inspect certain corporate records, receive notice of and attend meetings, vote on fundamental changes such as amalgamations or amendments to the articles, and dissent from those changes if they don't agree (the dissent and appraisal right entitles them to be paid fair value for their shares).

In practice, however, these statutory rights have limits. A minority shareholder can easily be frozen out of management or dividends in a closely held company, and litigation is expensive. The most effective protection is a well-negotiated shareholder agreement that spells out information rights, decision-making rights, dividend policy, and a clear exit mechanism. Statutory rights are a backstop — a good agreement is the real protection.