When a company has multiple shareholders, it is inevitable that disputes can arise. However, when disagreements become hostile and seem unresolvable, it is worth seeking legal advice from a qualified civil litigation solicitor. Arguments can range from differing opinions concerning the direction that the company should go and conflicting interests in the shareholders’ personal lives. No matter the dispute, your business and protecting its interests should always come first, to avoid financial loss and declining standards.
Here at Van Eaton Solicitors in London, we have years of experience in dealing with a wide range of civil litigation cases, from handling contentious probate disputes to professional negligence. We can analyse your case and gather the necessary evidence needed to achieve results, as efficiently as possible. Shareholder disagreements are common, but when they become contentious and incapable of resolution between the parties, seeking legal advice could be the next step.
Different Types of Shareholder Disagreements
Requesting advice from a highly qualified litigation team early in your dispute could save you financial detriment and escalated hostility down the line, as you work out the most appropriate strategies to follow. If you have simply fallen out with your shareholders and the issue isn’t resolved promptly, it could lead to a breakdown in communication, which can negatively impact your business. In other circumstances, shareholders can act in breach of the contract they have signed; expected behaviour should be detailed in the shareholder agreement and the articles of association, which you can find out more about here.
If one shareholder is being paid more than any others, this can cause major disagreements and lead to possible legal action being taken. For instance, if one shareholder draws a salary just for themselves, and receives excess remunerations, it is considered a conflict of interest as it directly affects the income of other shareholders. Furthermore, all shareholders should be kept informed of the financial affairs of the business, but it can be tempting for certain shareholders to make decisions without consulting their business partners. If minority shareholders are ever excluded from meetings by majority shareholders, this could be seen as an abuse of power and disputes can arise.
Alternative Dispute Resolution
Before seeking legal advice, you should check the business’s articles of association, which contain the company’s duties, as well as the rights and responsibilities of the members. The shareholder’s agreement should also be consulted, to check for any breaches, where you can identify whether you have a legal case to pursue. If you cannot resolve your differences through meetings or in-house negotiations, seeking legal advice can help save you from potential financial detriment.
Here at Van Eaton Solicitors, we can work to resolve disputes out of court wherever possible, implementing methods such as mediation and negotiation. These alternative methods are more cost-effective and less stressful than court proceedings, allowing you to resolve your dispute more privately and intimately. If your shareholder disagreement has to enter court proceedings, we will accompany you every step of the way. To find out more about our various services, please visit us here.
How We Can Help
Our civil litigation solicitors have been resolving cases and claims effectively for years in and around London, helping clients settle their differences and achieve the best results. Shareholder disagreements can be difficult to navigate, and professional advice is recommended to avoid any potential legal traps or loopholes.
To find out more, or to receive a free consultation, please give us a call on 0208 769 6739. Alternatively, you can fill out our online form here.