Close Corporations and Private Companies Under American and English Law : Protecting Minorities

Donahue v. Rodd Electrotype Company of New England should be viewed as a beachhead of progress concerning fiduciary duties owed among the shareholders in small companies. The author argues that the decision should be followed by other United States jurisdictions. He also encourages the courts in the Common Law Commonwealth, to follow the decision. However, he also concludes that The Companies Act, precludes English courts from developing equitable principles applicable to private companies.The author argues that the fundamental question of whether the will of the majority in a close corporation should sometimes prevail when the minority may suffer will continue to be answered with a typical response that the majority can exercise an appropriate degree of control. However, courts answering the question in the future will be capable of providing more illumination as a result of the Donahue decision