# kaal:claim:3017612-012

**Claim.** Shareholder agreements matter more in closely held corporations because minority holders have sunk substantial time or capital into the enterprise yet cannot exit through sale, since their shares lack a ready market.

**Type.** mechanism  **Support.** argued

**Holds when.**

- closely held corporations
- dissatisfied minority shareholders

**Source quote.**

> Minority shareholders in a closely held corporation are likely to have invested substantial time or capital in the enterprise, but those dissatisfied with the corporation's operation cannot sell their shares easily because the shares are not readily marketable.

**From.** Wulf A. Kaal, *Shareholder Agreements - National Report of the United States of America* (2017), II. Regulation of Shareholders' Agreements, page 6

**Cite as.** Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

**Verify.** sha256 of source PDF `33821db406f92efbe1698fbaed37687595c13b7ce5463b4a879df679fd4af1ac` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Shareholder%20Agreements%20-%20National%20Report%20of%20the%20United%20States%20of%20America.pdf

**Topics.** corporate-governance, defi

**Keywords.** close-corporations, minority-shareholders, illiquidity, exit, galler-v-galler

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