How to handle shareholder disputes

 

Shareholder disputes can arise for many reasons including:

  • The views of a shareholder have been ignored by the directors or board
  • The actions of the directors not being in the best interests of the business
  • Share dividends are not what was expected
  • A lack of communication between shareholders and the directors
  • Any breach of the shareholder agreement that was signed

If you do find yourself in a dispute of this sort, it is always advisable to get the help and advice of a solicitor who has experience of company law.

Case assessment

The first task will be to correctly identify the legal basis for the dispute. Ordinarily this will either be found in the shareholder agreement, but it may arise from the general corpus of company law.

Whilst this is a well-established field, it is constantly changing as new laws and decisions are made, and correctly assessing the nature of the case can be a complex task. However, it is much better to achieve this at the outset, rather than having to revise your case as you proceed!

Visit our company structure pages to learn more about this field.

Dispute resolution

In many shareholder disputes your solicitor can be your negotiator who attempts the resolution of your dispute.

It is in everyone’s best interests to bring it to a quick and efficient conclusion in order to avoid any negative impact on the business as a whole. This is why preparation is important. If your solicitor has a complete understanding of the dispute from the outset, they are far more likely to reach a resolution quickly.

Taking a shareholder dispute to court

However, if you cannot resolve shareholder disputes by negotiation, you may have to go to the courts and ask for a ruling.

This may require a more specialist litigator and so your solicitor may well instruct a barrister to present your case. You mustn’t think that you will always get a better result if you hold out until the matter comes to court. Sometimes that may be the case, but your solicitor will always advise you of the potential costs involved in lengthy litigation so that you can make an informed assessment.

If you are involved in a shareholder dispute, we can put you in touch with a cost-effective specialist company solicitor free of charge. Please call us on 0800 1777 162 or complete the web-form above to speak to one of our advisors.

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