Define: Adverse Domination

Adverse domination is a legal doctrine that allows minority shareholders to bring a lawsuit on behalf of a corporation when the majority shareholders or directors are engaged in fraudulent or wrongful conduct that harms the corporation.

Adverse domination protects minority shareholders by allowing them to bring a lawsuit on behalf of the corporation when the majority shareholders or directors are not acting in the best interests of the company.

To establish adverse domination, the minority shareholders must show that the majority shareholders or directors engaged in fraudulent or wrongful conduct, and that the majority shareholders or directors controlled the corporation during the time of the misconduct.

Yes, adverse domination can be used in any type of corporation, including both public and private companies.

Yes, a minority shareholder can bring a lawsuit individually without relying on adverse domination. However, adverse domination provides an additional legal avenue for minority shareholders to seek redress.

Under adverse domination, the court may order various remedies, including monetary damages, injunctive relief, or corporate governance changes.

Generally, a minority shareholder is not personally liable for the corporation’s debts or liabilities. However, there may be exceptions if the minority shareholder engaged in fraudulent or wrongful conduct that caused harm to the corporation.

No, adverse domination does not automatically force a minority shareholder to sell their shares. However, the court may order a buyout of the minority shareholder’s shares as a remedy if it is deemed necessary to protect the corporation’s interests.

Under adverse domination, a minority shareholder can be removed from the board of directors if their actions or decisions are deemed detrimental to the corporation. However, the removal must be justified and in accordance with the corporation’s bylaws and applicable laws.

Yes, a minority shareholder can bring a derivative lawsuit under adverse domination. A derivative lawsuit is a legal action brought by a shareholder on behalf of the corporation to address harm caused by the majority shareholders or directors.