A special resolution done by majority share holders can simply change the rights of certain shares and make them useless. They can reduce the share's voting rights or reduce dividend payment.
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It is true that a shareholder who controls a majority of the votes can be quite powerful indeed. This is a somewhat murky area of the law, but in many cases, a majority shareholder has a fiduciary duty to do what is best for the corporation as a whole (not just the majority shareholder, but all shareholders), an obligation that logically parallels the obligation of the board of directors (which controls a corporation with much the same effect as a majority shareholder).
In Delaware, where most large corporations are incorporated, a major shareholder or group of shareholders can have less than 50% of the vote can still be considered de facto majority shareholder if they have influence over the rest of the shareholders. Majority shareholders, either de jure or de facto, are required to act only with "entire fairness" to all the shareholders, and courts may invalidate or otherwise grant relief on transactions made by majority shareholders that are not fair to all shareholders. If a majority shareholder takes actions directly, it has the burden of proof in court to show that any actions taken accord with the "entire fairness" standard. A more in-depth discussion of these issues can be found in this article out of the Harvard Law School Forum on Corporate Governance and Financial Regulation.
Kevin Li
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