Ontario Solicitor Bar Practice Exam 2025 – Comprehensive Test Prep

The rationale for excluding votes from shareholders with an interest in a going private transaction is primarily to ensure fair approval from unrelated shareholders. This exclusion is crucial because allowing interested shareholders to vote could create a conflict of interest that skews the results. It ensures that the decision-making reflects the views and interests of those shareholders who are not directly impacted by the transaction, promoting a fair and equitable approval process. This is particularly important in situations where the transaction could significantly affect the value of shares or the future of the company.

In essence, by excluding interested votes, the process maintains integrity and protects the interests of the remaining shareholders, who may be more likely to view the transaction from an objective standpoint without the influence of potential personal gain or loss that the interested shareholders may have. This principle is fundamental in corporate governance and aligns with best practices to foster transparency and fairness in significant corporate transactions.