Shareholder dispute lawyers

Why you need a shareholders’ agreement 

When a company is formed, shareholders often delay creating a shareholders’ agreement. New shareholders may be too optimistic to see risks or simply postpone the discussion. 

Shareholder disputes can harm a business. While a company’s articles of association may help with some issues, they lack tailored clauses for most disputes. A shareholders’ agreement is more effective at addressing these problems.  

Minority shareholders have few rights under the standard articles of association and relying on the Companies Act 2006 can be costly and slow. A shareholders’ agreement offers protection like tag-along rights, access to company information and higher decision thresholds, giving minority shareholders more influence. 

Possible outcomes of a shareholder and/or director dispute 

Having dealt with many shareholder disputes, we always advise clients that going all the way to a court trial is very expensive, risky and damaging to the company. A negotiated settlement is almost always better.  

Common ways to find an acceptable outcome include: 

• splitting the business assets 
• one party buys the other out  
• negotiating enhanced protection and rights 
• removal of directors 
• sale of the business