CABO VERDE Trends and Developments Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Manuel Esteves de Albuquerque and Júlio Martins Júnior, Raposo Bernardo & Associados
Minority Shareholders’ Protection and the Balance of Powers in the Commercial Companies Code of
establishes limits intended to prevent arbitrary dis - crimination among shareholders. Article 22 estab - lishes a minimum set of fundamental rights for all shareholders, including: • the right to participate in profits; • the right to vote; • the right to information; and • the right to participate in the appointment of corpo - rate bodies. This principle is particularly important because it pre - vents the majority from using its position to exclude certain shareholders from participating in corporate life. Protection is reinforced by Article 23, which declares null and void any clauses that exclude a shareholder from participating in profits or completely exempt them from corporate losses. The underlying logic is simple: whoever participates in the business risk must benefit proportionally from the results obtained by the company. The model adopted by the Cabo Verdean Commer - cial Companies Code demonstrates that modern cor - porate governance not only demands business effi - ciency: it also demands transparency, accountability and respect for the rights of those who, despite not holding control of the company, remain its legitimate owners. The right to information as an instrument of supervision Among all the protection mechanisms for minority shareholders, the right to information assumes a cen - tral importance. No shareholder can properly exercise their rights without knowing the economic and finan - cial situation of the company. In limited liability companies ( sociedades por quo- tas ), Article 181 recognises the right of shareholders to obtain information on corporate business, con - sult company books and documents, and inspect its assets. The legislator goes even further by prohibiting the articles of association from excluding or unjustifi - ably limiting this right. Information cannot be refused when there is suspicion of practices capable of gen -
Cabo Verde Introduction
The protection of minority shareholders constitutes one of the fundamental pillars of modern corporate governance. In commercial companies, especially those where share capital is concentrated, the rela - tionship between majority and minority shareholders tends to generate tensions inherent to the distribution of decision-making power. One of the main challenges is ensuring that the majority principle – indispensable for the efficient operation of the company – does not turn into an instrument of oppression against share - holders who do not control the majority of votes. The Commercial Companies Code of Cabo Verde, approved by Legislative-Decree No 2/2019, demon - strates a clear concern with this matter. The preamble of the statute itself expressly identifies the reinforce - ment of minority shareholders’ protection as one of the core objectives of the corporate reform, highlight - ing the need to increase transparency, strengthen the right to information, and expand the accountability mechanisms for directors. The protection of minorities is not merely a matter of internal justice among shareholders. It is also an essential requirement for attracting investment, devel - oping the capital market, and strengthening investor confidence. The Corporate Governance Principles of the Organisation for Economic Co-operation and Development (OECD) recognise that the effective pro - tection of minority shareholders is an indispensable condition for the existence of efficient and transparent markets. In this context, it is important to analyse how the Cabo Verdean legal framework seeks to ensure the balance between the legitimacy of majority power and the pro - tection of the rights of corporate minorities. The principle of equality of shareholders The first guarantee of minority shareholders is found in the very principle of equal treatment of shareholders. Although the Code recognises contractual freedom in the organisation of the company, it simultaneously
142 CHAMBERS.COM
Powered by FlippingBook