A minority investor’s protection is contractual, because ownership alone confers little in a company controlled by someone else.

Governance. A board seat or observer right; protective provisions requiring consent for defined actions; and a defined information package with deadlines.

Economics. Liquidation preference and participation; dividend rights; and anti-dilution protection.

Transfer. Rights of first refusal and co-sale on the majority’s transfers; tag-along rights on a change of control; and restrictions on the majority transferring to competitors.

Exit. A put right exercisable after a period at a defined price; a registration or drag participation right; and in some structures a redemption obligation with a funding mechanism.

Related party controls. Consent requirements for transactions with the majority owner and its affiliates, and for compensation above a level — the mechanisms through which value most often leaks.

Reporting and audit. Annual audited or reviewed statements, quarterly management accounts, the budget, and inspection rights.

Remedies. Specific performance for governance breaches, and a stated consequence for failure to deliver information — commonly an escalation of rights.

Diligence. Existing shareholder agreements, the capitalization table verified against the records, and the company’s existing debt covenants, which may prohibit the very payments the investor is relying on.