Navigating Shareholder Disputes
Running a business together is not always plain sailing, and sometimes, disputes between business partners and shareholders can occur. In a close-knit business community , it is important to maintain relationships and support local businesses to thrive, and so resolving potential disputes with the help of an expert local Solicitor can make all the difference. Andrew Meech, a Director at JCP Solicitors, provides his top tips on how to navigate director and shareholder disputes.
What Are Shareholder Disputes?
Shareholder disputes often occur when there is conflict between shareholders and directors who are in most cases the same people. There are many reasons as to why shareholder disputes arise, but a common cause is where one party has been excluded from participation in the management of the company in question.
How Disputes Impact Business
Shareholder disputes can leave businesses in deadlock when it comes to making important decisions, meaning day-to-day operations can be affected. This can lead to financial losses, adversely affect employees and weaken a business’s reputation. It is vital to find an efficient, effective resolution.
How To reduce to risk of a Shareholder Disputes
A shareholders’ agreement which amongst other things sets out the rights, responsibilities and authority of the shareholders to a company can help significantly reduce the risk of a dispute arising but can also contain material provisions which provide a mechanism for dealing with certain situations including disputes between the shareholders. Having a clearly written shareholder or partnership agreement which outlines how disputes will be navigated is key to dispute resolution, and so you should always speak to a Solicitor to draft the necessary documents as an impartial, expert third party. However, it is recognised that in a significant number of cases a shareholders’ agreement is not in place and therefore it is even more important to obtain specialist advice from a solicitor experienced in this area as soon as possible.
Finding Resolution
There are several routes to take to resolve shareholder or business partner disputes, and engaging an expert Solicitor is the vital first step. Usually, a resolution can be reached once you have obtained advice. Your Solicitor can manage negotiations, represent you in mediation, and if necessary, deal with the litigation of the dispute, all the while advising you on the best course of action to find an amicable, beneficial and effective solution.
Contact Director Andrew Meech by emailing hello@jcpsolicitors.co.uk or telephone 03333 208644.