This practice often requires the aggressor to assume significant debts in the takeover, and these debts often are paid for by selling off parts of the target corporation's business. Restraints and protections do exist for these situations. In takeovers of registered or large, publicly held corporations, federal law requires the disclosure of certain information, such as the source of the money in the tender offer. In smaller corporations, a controlling shareholder, who holds a majority of a corporation's shares, cannot transfer control to someone outside the corporation without a reasonable investigation of the potential buyer. A controlling shareholder also cannot transfer control where there is a suspicion the buyer will use the corporation's assets to pay the purchase price or will otherwise wrongfully take the corporation's assets.
Corporations can employ defensive tactics to fend off a takeover.
Dissolution A corporation can terminate its legal existence by engaging in the dissolution process. Most statutes allow corporations to dissolve before they begin to operate as well as after they get started. The normal process requires the directors to adopt a resolution for dissolution and the shareholders to approve it, by either a simple majority or, in some states, a two-thirds majority. Derivative Suits Shareholders can bring suit on behalf of a corporation to enforce a right or remedy a wrong done to the corporation. A common claim in a derivative suit would allege misappropriation of corporate assets or other breaches of duty by the directors or officers.