Why You Need a Corporate Lawyer for Shareholder Disputes

There are many different kinds of shareholder disputes and the best way to solve them is to consult with commercial lawyers. A lawyer will be able to see things with an impartial eye and help you negotiate through what is often a painful maze to get the best outcome for you and for the company. So what kinds of disputes can happen if you own or are a director of a company?

Here are just some: –

  • Disagreement over the direction the company is taking
  • conflict of interest if you or any other director has an interest in another business
  • Poor performance from a director or a shareholder
  • Disputes can arise if the directors or board members are paying themselves high wages instead of paying shareholders
  • Disagreements between partners for various reasons.

If you are an owner, it is wise to be prepared to handle disputes in advance so that you can get on top of them immediately rather than letting them drag on or escalate, neither of which will do the company any good.

A corporate lawyer can set up an agreement as to the steps you will take if and when a dispute between any parties happens. Having a legal agreement will ensure that the dispute is settled quickly. It may prevent the need – and cost of – going to court to settle. Mediation by a neutral party can ensure that a fix that is agreeable to both parties is found. This may be that the aggrieved party is bought out by the others at a fair price.

It is wise to seek and implement early advice when there is a dispute. If no one knows what their legal rights are or how to implement them, the disagreement is likely to escalate until it is out of control.

The court may then decide to wind up the company and they have a legal right to do this. It is far better to be willing to negotiate rather than insisting on your strictly legal rights. Put yourself in the shoes of the aggrieved person and try to see the situation from their angle. It may help your understanding and enable you to find common ground to save the business.

It is important to always understand your role in the business, your rights and your responsibilities and to carry them out to the best of your ability.  A director has a great responsibility to be transparent in all that they do and plan to do, communicating clearly with the other management and shareholders so they know what to expect and what your aims and goals are.  Only then can disputes be kept to a minimum and be resolve quickly and responsibly.