Shareholder disputes

Disputes between shareholders usually start small: a dividend not paid, a question left unanswered, a meeting called at short notice. Because the parties still own the company together, each side often waits, hoping the other will give way. Meanwhile the business suffers, information becomes harder to obtain, and decisions taken in the interval may be difficult to undo later. Waiting rarely improves your position; knowing your options early usually does.

The law gives shareholders a range of tools, and the right one depends on what you want to achieve: information, a decision set aside, compensation or a way out. Along the way, a dispute touches:

• the rules on challenging a resolution of the general meeting, and on having it set aside;
• the rules on abuse of majority and abuse of minority;
• the rules on obtaining the company’s books and records when the majority will not share them;
• the rules on asking a court to appoint an expert to investigate how the company has been run;
• the rules on interim measures, such as a provisional administrator or the suspension of a decision while the case is heard;
• the rules on whether a shareholder may sue in the company’s name when those running it will not;
• the rules on enforcing a shareholders’ agreement, and on whether a court will order performance or only award damages;
• the rules on arbitration and mediation clauses, and on whether a dispute must go there first;
• the rules on asking a court to dissolve a company that can no longer function.

Our lawyers can support you with this.