A Litigator’s Guide to … Shareholder Disputes

3 Minutes

Shareholder disputes can be very damaging to a business, causing a raft of practical issues including deadlocks in decision making, impact to wider staff morale and poor business performance.

These disputes can occur in companies of all shapes and sizes but are often seen in small to medium-sized owner-managed and family-run businesses, where misaligned objectives or personality clashes can escalate into more significant disputes. Disputes can occur for any number of reasons including disagreements over decisions, personal contributions to the business and issues surrounding dividends.

This guide offers some background to the legal issues that commonly arise from shareholder disputes, our thoughts on how to avoid them and how to react should a dispute arise.

The Legal Issues

Of all the types of commercial disputes we see, shareholder disputes are unusual for a number of reasons. There is often a high degree of tension that has commonly been building for some time. Typically, there will be no ‘easy’ route out; the protagonists are locked into the business until a solution is found. Above all, these disputes will bring into play a wide range of legal issues which need to be considered to properly understand the rights and obligations of the parties, in order that we can unlock the dispute and find a resolution.

Common legal issues that crop up include:

  • Shareholder Agreements and Other Contractual Terms
  • Unfair Prejudice
  • Directors' Duties
  • Employment Issues
  • The Guide also includes further detail on ‘How To Avoid A Shareholder Dispute’ and ‘What To Do If A Shareholder Dispute Arises’.

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    How We Can Help

    We have a wealth of experience in advising and representing clients in all types of shareholder disputes. We act for businesses of all sizes as well as individual directors, shareholders and partners.

    We are always happy to speak informally in the first instance and help where we can. If the case warrants a formal instruction, we offer a high level of service from our experienced team. Please get in touch if you would like to discuss.

    Contact details:

    Sarah Holland | Partner

    email: sholland@loneystewartholland.co.uk
    call: 07834 818047

    Alistair Stewart | Partner

    email: astewart@loneystewartholland.co.uk
    call: 07869 435226

    website: www.loneystewartholland.co.uk