Shareholder Disputes

Whilst shareholder disputes can arise in several ways, in our experience the most common form arise out of the scenario whereby two individuals, generally long-term friends, have known each other for a number of years and then decide to set up a company. Both individuals will generally be directors and equal shareholders. Whilst things often go well at the beginning, issues generally start to arise out of the following:

  • One of the individuals is not putting as much time and effort into the business as the other
  • The individuals concerned have different views on the direction of the company and cannot agree on the direction
  • Payment issues (ie one party receiving less than the other or one party dissolving the value of their shareholding)
  • One of the parties refuses to work with the other

Shareholder Disputes

A written shareholders agreement, together with tailored articles for the company, can help to resolve any disputes. That being said, it is often the case that there is no shareholders agreement in place and that standard articles have been adopted. In such circumstances, a deadlock can arise with parties becoming somewhat entrenched. Shareholder disputes can be extremely distracting and have significant impact on the business. Getting to understand the real reasons for the dispute and goals of the parties can be crucial to achieving any resolution of the dispute without lengthy legal action.

Talk to Tollers

In our experience, disputes are often resolved by way of negotiation, mediation or, as a last resort, Court action. In terms of a negotiated settlement, the most common outcome will be for one of the following to occur:

  • one party buys the other’s shares after a valuation has taken place;
  • there is a sale to third parties outside of the company;
  • the company purchases the shares.

There are many other options open to resolve shareholder disputes and Tollers can provide tailored advice that best suits your objectives and circumstances. Should you require further information or assistance then please contact us on 01604 258558 or complete the contact form below.

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Our Shareholder Disputes Experts

Gary Adamson
Solicitor
Gary has gained significant experience in a wide range of dispute resolution disciplines during a 20 year career...
Victoria Graham
Solicitor
Victoria Graham is a Dispute Resolution Solicitor, based in our Corby office. Victoria deals with disputes for both commercial entities and the public...
Tristan Benson
Partner
Tristan has extensive experience gathered over his time as a solicitor, working with a wide variety of companies and private individuals...
Gabriella Croxford
Trainee Solicitor
Gabriella Croxford is a Trainee Solicitor at Tollers having previously worked as a PA/Legal Secretary with the firm. Currently working in Dispute Resolution
Gary Adamson
Solicitor
Victoria Graham
Solicitor
Tristan Benson
Partner
Gabriella Croxford
Trainee Solicitor
Meet the Full Dispute Resolution Team

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