The Securities and Exchange Commission yesterday proposed a rule to help protect minority stockholders when a corporation unilaterally decides to buy their shares and become a private company.

The practice, termed "going private," was most prevalent in 1974 when the depressed stock market gave companies the opportunity to buy their own stock at bargain prices.

Normally in such cases, the majority interests in a company instigate the move to go private. The minority stockholders have little choice except to sell their shares at the price offered by the majority.

The proposed SEC rule sets out disclosure requirements for companies that plan to go private. The proposal also spells out a fairness standard for minority shareholders with accompanying penalties for violations of the standards.

One of the most noted instances of a publicly-held company going private was when Wells, Rich, Greene, Inc., a New York advertising firm, offered stockholders $3 cash and $8, 10-year debentures for their once high-priced shares.

The firm went public in 1968 at $17.50 a share, and a new offering in 1971 was priced at $21.75. But when the company went privatt in 1974, its stock plunged to a low of $5.50. About 85 per cent of the minority stockholders took the depressed price offered by the firm, which increased the holding of the chief executive Mary Wells Lawrence from 7 per cent to 24.7 per cent.

The SEC pointed out that minority shareholders who did not accept the majority's offer for their stock may find that, once the company goes private they have no market for their stock.

The SEC said about 10 companies have gone private in recent years.