Tom is the sole director and largest shareholder of Newage Corporation,a close corporation.Jim and Janice,the two other shareholders of Newage Corporation,allege that Tom is paying himself a large salary (no dividend has been paid in the last three years).Tom also refuses to hire them as employees of the corporation.Jim and Janice are complaining of:

Question

Tom is the sole director and largest shareholder of Newage Corporation,a close corporation.Jim and Janice,the two other shareholders of Newage Corporation,allege that Tom is paying himself a large salary (no dividend has been paid in the last three years).Tom also refuses to hire them as employees of the corporation.Jim and Janice are complaining of:

Quizplus · Accepted Answer

When a group of shareholders has been isolated for beneficial treatment to the detriment of another isolated group of shareholders,the disadvantaged group may complain of oppression.In this case,oppression exists because as minority shareholders of a close corporation,Jim and Janice do not have a fair market value for their shares and have not received either dividends or salaries though Tom (the majority shareholder)is giving himself a large salary.

Tom Is the Sole Director and Largest Shareholder of Newage