Minnesota courts have repeatedly held that controlling shareholders in private, closely-held corporations are akin to partners in a partnership.
Partners are generally viewed to have a fiduciary duty to one another and to the partnership. Thus, majority or controlling shareholders owe a fiduciary duty to the corporation and to their co-shareholders. But what about minority shareholders? Do they owe a similar fiduciary duty? And, does conduct that results in a freeze-out of a minority shareholder affect the answer to this question? These issues can be of great importance to minority shareholders, particularly those who wish to continue their careers in the same field after leaving or being forced out of the corporation in which they own stock. If minority shareholders owe a fiduciary duty, they may be prevented from competing with the corporation, thereby significantly undermining their future business and professional prospects.