It most commonly occurs in non-publicly traded companies, because the lack of a public market for shares leaves minority shareholders particularly vulnerable, since minority shareholders cannot escape mistreatment by selling their stock and exiting the corporation.
[1] The majority shareholders may harm the economic interests of the minority by refusing to declare dividends or attempting a squeezeout.
[4] The potential for shareholder oppression arguably increased when corporate law was changed to eliminate the common law right of minority shareholders to veto fundamental corporate changes such as mergers.
[10] In the United Kingdom, the Companies Act 2006 governs remedies for minority shareholder oppression.
[13] Occasionally, the oppressive conduct may even justify the involuntary dissolution of the corporation in order to protect the minority shareholders.