tough economic times can now and again be applied to mask fraudulent activities. In times like these, minority stockholders who suspect improper action by the majority should be more vigilant than ever.

often minority stockholders, specially those not involved in the business, plainly get applied to receiving little financial information about the establishment. The attitude often is, there’s no cause for alarm as long as the dividends or other payments keep coming. In those circumstances, it’s all too easy to fall into the trap of not paying close attention to the company’s finances.

in normal economic times, a sudden absence or unavailability of revenue would likely awaken suspicion of a minority possessor and there’s no easy comprehensible statement that a majority possessor can fall back on in such a case. Any sudden adjust in the company’s financial behavior would likely be noticed.

however, in an economic downturn such like the one we are experiencing now, the majority has a built-in excuse – business is down and “things are tough throughout. ” while this can, as a matter of fact, be genuine, a downturn such like the current recession makes minority owners specially vulnerable. You recognise business is down, but by how much? If business is actually down 20%, but your collaborator tells you business is down 40%, would you ever learn the truth?

many individuals find it hard to believe that any individual, including their fellow stockholder, would do such a thing; but it happens. If you’re reading this, chances are you can already distrust your collaborator and been having suspicions for numerous time. If your majority stockholder has any business acumen at all, he just can realize the prospect that an economic slowdown presents to make sure that the ache is shared disproportionately, with you bearing the brunt of it.

one of they ways to protect yourself is to be more proactive. Now is not the time to sit back and do nothing when the majority stockholder fails to provide you with financial information. As a matter of fact, now is the time to demand more information than ever before. Although minority owners aren’t eligible to inspect all of a company’s books and records, an attorney who practices in this area of law can guide you about which records you’re eligible to see.

the maxim “knowledge is power” could not be more genuine than in times like these.