A capital call requires owners to contribute additional funds. Whether the company can make one, and what happens to an owner who declines, is decided entirely by the operating or shareholders’ agreement.

Most agreements make additional contributions voluntary, which means a company needing money must either borrow or persuade. Where calls are mandatory, the remedies for non-payment vary: dilution of the non-contributing owner, treatment of the shortfall as a loan from the contributing owners at a stated rate, forfeiture, or simply a claim for the money.

Dilution is the flashpoint. A call priced below fair value, made at a moment the minority cannot fund, is a recognized route to squeezing someone out — and it is also sometimes a legitimate emergency financing. Courts asked to distinguish them look at whether the company genuinely needed the money, whether the price was fair, whether alternatives were considered, and whether the timing and terms were designed to exclude.

For minority owners, the protections worth negotiating in advance are pre-emptive rights, a requirement that calls be at fair value supported by an independent determination, and a supermajority requirement for issuing new equity.