Shareholder disputes Solicitors
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Shareholder Disputes Legal Support
Don’t let shareholder disputes derail your business. Get expert legal support today. Internal disagreements can quickly become major roadblocks for any company. Whether it’s a breakdown in communication, concerns over management decisions, or unfair treatment, shareholder disputes can be complex and emotionally charged.
What are shareholder and director disputes?
Shareholder and director disputes occur when shareholders and directors of a business end up at loggerheads over the direction and management of the business.
Disputes usually stem from beliefs that one party isn’t contributing enough to the business, personal issues that damage business relationships or a general conflict of interest.
These disputes can become more serious when the disputers are not aware of their legal rights or understand the best business strategy and practice to implement.
Spencer Churchill Solicitors have a wealth of expertise in business management law and can assist with choosing the best business strategy that aligns with your business goals.
Shareholder Disputes: Protecting Your Rights
Shareholder disputes can be disruptive and emotionally charged. Whether you’re a majority or minority shareholder, understanding your rights can help you manage these conflicts effectively. Here’s a breakdown of some key shareholder rights:
Voting Rights
Shareholders typically have the right to vote on important company matters such as electing directors, approving mergers and acquisitions, and changes to the company’s capital structure. Voting rights are usually proportional to the number of shares held.
Right to Information
Shareholders have the right to access certain information about the company, including financial statements, board meeting minutes, and material contracts. This information is essential for informed decision-making.
Right to Sue for Wrongdoing
If a shareholder believes the company’s directors or management have acted in a way that harms the company’s interests, they may have the right to sue for damages.
It’s important to note that these are just some of the basic shareholder rights, and the specific rights will vary depending on factors such as the company’s jurisdiction and the type of shares you hold.
Derivative claims advice
Shareholders may make a derivative claim if they wish to challenge directors or third parties on the grounds of negligence or a breach of trust.
Derivative claims are governed by legislation stated in the Companies Act 2006 and we can advise on the procedure of making a derivative claim and what the best course of action to take will be.
To find out more information about our derivative claims advice, contact us.
Face Shareholder Disputes with Confidence
Internal disagreements can be stressful and complex. Get a head start on resolving the issue with our support.
Empower Yourself with Knowledge
This free Shareholder Dispute Resolution Toolkit empowers you with clear guides on shareholder rights, easy-to-follow checklists for gathering evidence, and expert strategies for communication, negotiation, and alternative dispute resolution methods.
Get Clarity on Your Situation
Don’t stay in the dark. Get a free, no-obligation Shareholder Dispute Consultation with our legal experts. We’ll listen to your situation, answer your questions, and provide initial guidance.
Understand Your Options
Get a free, no-obligation Shareholder Dispute Assessment with our legal experts. We’ll look at the details of your situation and explore potential legal options for resolving the dispute.
What advice do you give on shareholder and director disputes?
Our specialist team can advise on a variety of shareholder and director dispute issues:
Boardroom disputes advice
If a dispute arises between company directors and this affects the running of the business, then resolving this quickly is vital to the company’s reputation and operations.
Company shareholders and directors can sometimes find themselves unable to settle a dispute and we can provide expert advice on the best way to proceed through negotiations and find a solution that all parties will be on board with.
To find out more information about our advice on boardroom disputes, contact us.
Removing a shareholder
If a disagreement between shareholders should occur, this can lead to consideration over whether to take action to remove a shareholder.
We can advise on appropriate measures to take when removing a shareholder or director from a business, as well as assess articles of association and shareholder agreements.
To find out more information about our advice on removing a shareholder, contact us.
Shareholder agreements advice
Our specialist team have a wealth of experience in preparing and assessing shareholder agreements.
We can make sure that there is supporting documentation that clearly outlines the relationship between shareholders for business stability.
To find out more information about our advice on shareholder agreements, contact us.
Derivative claims advice
Shareholders may make a derivative claim if they wish to challenge directors or third parties on the grounds of negligence or a breach of trust.
Derivative claims are governed by legislation stated in the Companies Act 2006 and we can advise on the procedure of making a derivative claim and what the best course of action to take will be.
To find out more information about our derivative claims advice, contact us.
Directors fiduciary duty breach advice
Company directors are in a position of power and are responsible for the overall direction and management of the company.
Under the Companies Act 2006, there are many common law duties that apply to directors such as a duty to have independent judgement and exercise diligence and care.
If a director is in breach of their duty towards the business, action can be taken against them.
We offer specialist advice on taking action against directors who do not do their fiduciary duty.
To find out more information about our advice on director duty breaches, contact us.
Partnership disputes
A partnership dispute can create big problems for a company and threaten not only the reputation of the business but also jeopardise the careers of those involved.
Managing a partnership dispute effectively and ensuring that it does not escalate is essential to preventing damage to the business.
We offer specialist advice to put our clients in the best position for negotiation or litigation when it comes to partnership disputes.
To find out more information about our advice on partnership disputes, contact us.
The Benefits: Choose Get Legal Advice
There are many benefits to choosing Get Legal Advice for managing your shareholder disputes.
Thinking of leaving the company? We can also help design an exit strategy that maximises your return and ensures a smooth transition for all involved parties.
Don’t let shareholder disputes hinder your business success. Get Legal Advice can help you achieve a fair and lasting resolution.
Deadlock Resolution
To break impasses between shareholders and directors, we can guide open communication, facilitate negotiation, and explore alternative dispute resolution (ADR) options, such as arbitration.
Minority Shareholder Protection
We advocate for your rights as a minority shareholder, so you’re not unfairly disadvantaged by a majority vote.
Misappropriation of Assets
If you suspect directors or controlling shareholders are misusing company assets, our team has the expertise to recover what’s rightfully owed.
Breach of Contract
We can handle disputes arising from broken agreements between shareholders or directors, ensuring contractual obligations are upheld.
Fraudulent Activity
Uncovering and addressing fraudulent behaviour within the company requires a skilled legal team. We can help you investigate, gather evidence, and pursue appropriate legal action.
Mediation & Negotiation
We can facilitate communication between parties to find an amicable solution that benefits everyone involved.
Alternative Dispute Resolution (ADR)
We are well-practiced in various ADR methods such as arbitration, which often proves faster and less expensive than litigation.
Shareholder Agreements
A well-drafted shareholder agreement minimises future disputes by clearly outlining rights, responsibilities, and exit strategies for all parties. We can draft or review existing agreements to ensure your interests are protected.
Boardroom Protocols
Clear governance structures and protocols are essential for a functioning board. We can help establish these protocols to prevent conflict and promote productive decision-making.
Why choose Spencer Churchill for advice on shareholder disputes?
At Spencer Churchill Solicitors, we strive to protect business partnerships and provide practical, legal solutions to disputes that have your business interests at heart.
We take a pragmatic approach to shareholder and director disputes in line with official legislation to put our clients in the best position they can be in regardless of circumstances.
Shareholder and director disputes FAQs
How do you resolve a shareholder dispute?
Shareholder disputes are very common in business and often this is a result of a breakdown in communication and conflict of interests.
At Spencer and Churchill Solicitors, we pride ourselves on providing specialist advice on shareholder disputes and effective solutions.
Can a shareholder remove a director?
A shareholder cannot directly dismiss a director but if a shareholder has over 5% of the company’s voting rights, then they can arrange a meeting to discuss the potential dismissal of the director.
What is the best way to resolve a shareholder dispute?
There are a number of different ways to resolve a shareholder dispute and first and foremost, negotiation should be the tactic used to hopefully reach a compromise.
Commercial litigation will be considered as the option if this doesn’t work.
What fiduciary duties does a director have?
A director has fiduciary duties that should be a reflection of the trust and dedication to the company and its members. A director is expected to act in the best interests of the business and in an ethical way.
What is a derivative action?
A derivative action gives the permission of a minority shareholder to start proceedings on the company’s behalf in order to take action against company directors who they believe are in breach of their duty.
What are the common causes of director disputes?
Director disputes typically result from disagreements over company strategy, management practices, financial decisions, and conflicts of interest among directors.
What rights do shareholders have?
Shareholders have rights including voting on significant corporate matters, receiving dividends, inspecting company books and records, and suing for wrongful acts.
What should I do if my personal interests conflict with the interests of the company?
If your personal interests conflict with the interests of the company, you should disclose these conflicts to the board and avoid decision-making processes that could be influenced by your interests.
How can the company continue to do business if the board of directors is deadlocked?
If the board of directors is deadlocked, the company can continue to do business by seeking mediation or arbitration, calling a shareholders’ meeting for a resolution, or, as a last resort, through judicial intervention.
What happens when directors disagree on a decision?
When directors disagree on a decision, they should aim to resolve the issue through discussion and compromise or follow the company’s articles of association which may require voting to make a decision.
As a director, what can I do if a decision I disagree with has been taken at a meeting I didn't attend?
As a director, if a decision you disagree with has been taken at a meeting you didn’t attend, you can request a reconsideration of the decision at the next board meeting, providing your reasons for the disagreement.
How can the board of directors remove a director?
The board of directors can remove a director according to the procedures outlined in the company’s articles of association, which usually involves a board vote and possibly a shareholder vote.
How should the board of directors react to activist shareholders?
The board of directors should engage with activist shareholders by listening to their concerns, considering their proposals, and explaining the board’s strategic decisions and governance policies.
My company is a ‘quasi-partnership’ and I am in dispute with my fellow shareholder-director, what should I do?
If your company is a ‘quasi-partnership’ and you are in dispute with your fellow shareholder-director, seeking mediation or legal counsel to resolve the dispute while protecting your interests and the company’s continuity is advisable.
I am a director of a company facing insolvency. What should I do?
As a director of a company facing insolvency, you should seek professional advice from an insolvency practitioner to ensure you comply with your legal obligations and consider the best interests of creditors.
I am a director of a company in liquidation. What duties do I owe to the company now?
As a director of a company in liquidation, you have duties to cooperate with the liquidator, ensure all company documents are available, and assist in realising the company’s assets to pay off creditors.
What should I do if I think a fellow director is acting fraudulently/stealing from the company?
If you think a fellow director is acting fraudulently or stealing from the company, you should report this to the board and seek an independent investigation, potentially involving legal or law enforcement actions.
Does the board of directors have to act in accordance with a shareholder’s agreement if it conflicts with the company’s Articles of Association?
The board of directors should act in accordance with the company’s Articles of Association unless the shareholder’s agreement has been made part of the company’s constitution, in which case specific legal advice may be needed.
Who instructs the solicitor: the company or me?
Generally, the company instructs the solicitor in corporate matters, unless you are seeking personal legal advice, in which case you would instruct the solicitor independently.
What fiduciary duties do directors have?
Directors have fiduciary duties to act in good faith in the best interests of the company, to act within their powers, to exercise independent judgment, to exercise reasonable care, skill, and diligence, and to avoid conflicts of interest.
What are the consequences for a director in breach of their fiduciary duties?
A director in breach of their fiduciary duties may face legal actions from the company or shareholders, potential disqualification from serving as a director, and personal liabilities for losses incurred by the company.
As a director, what should I do if I feel that the board is acting improperly?
If you feel that the board is acting improperly, raise your concerns with the board, seek legal advice, and, if necessary, inform the shareholders or relevant authorities, depending on the severity of the impropriety.
Am I personally liable for improper or fraudulent conduct by my fellow directors?
You are not automatically personally liable for improper or fraudulent conduct by your fellow directors unless you were complicit in the conduct or breached your directorial duties.
Is the company liable for the fraudulent acts of a rogue director?
The company may be liable for a rogue director’s fraudulent acts if those acts were within the scope of the director’s apparent authority, though specific circumstances can affect liability.
What should I do if I believe a fellow director is paying bribes to win business?
If you believe a fellow director is paying bribes to win business, you should report this activity internally to the board or relevant compliance officers and may need to escalate it to external authorities or seek legal advice to ensure compliance with anti-bribery laws.