Company Shareholder Disputes

Many businesses operate through a company structure. The company is a separate legal entity which owns the assets of the business and incurs the debts of the business. A company is ultimately controlled by its shareholders but its directors (sometimes one or more of the shareholders) operate the business on a day-to-day basis. But what happens if the shareholders are in dispute over matters such as the control, finances or future direction of the company?

It is important that disagreements between shareholders be resolved quickly in order save time, money and strain on the business. The best strategies to deal with such disputes are as follows:

* Negotiation between shareholders to seek an amicable agreement.

* If that fails, mediation can be a relatively fast and cost-effective method to bring the parties together with the help pf an independent mediator .

* If there is a shareholders agreement in existence, it should provide a dispute resolution clause which may allow, for instance, one shareholder to exit the company and sell his shares to other shareholders.

* If all else fails, a shareholder may be forced to seek Court orders for different types of relief including including the enforcement of a shareholders agreement, the buyout of shares or even the winding up of the company.

This is a complex area of the law and, obviously, the assistance of a lawyer at an early stage may well lead to the dispute being resolved before it gets too far out of control.

August 2026