Resolve shareholder disputes quickly in the right way for your business
Shareholder disputes can be very damaging for a business, with the potential to delay key decisions, harm working relationships and, in the worst cases, even cause a company to fail. Getting expert advice from a specialist shareholder dispute solicitor early on can give you the best chance of avoiding these sorts of negative outcomes and protecting your business.
David W Harris & Co offers sensible, pragmatic shareholder dispute resolution for clients across South Wales. With extensive experience underpinned by strong skills in negotiation, alternative dispute resolution and court proceedings, we can provide the expertise you need.
Our dispute resolution solicitors in South Wales can help with matters including:
- Advice on shareholders’ legal rights
- Interpretation of shareholders’ agreements and articles of association
- Breach of shareholders’ agreements
- Minority shareholder unfair prejudice petitions
- Disputes between shareholders and company directors
Our team regularly deal with shareholders’ rights for a wide range of businesses, including in relatively straightforward and much more complex scenarios.
No two shareholder dispute cases are the same, with each having its own particular issues and areas of concern. As such, our experts will tailor their approach to the particular shareholder conflict you are facing, finding the best way forward for your commercial and personal interests.
Discuss your requirements with our shareholder dispute solicitors in Swansea, Pontypridd and Talbot Green
We offer a free first consultation to answer your questions and help you decide whether we are the right people to assist you.
Please use our simple online enquiry form to book a free initial chat with one of our shareholder dispute solicitors. We respond promptly to all enquiries.
Common questions about shareholder disputes
What legal rights do shareholders have?
Shareholders’ legal rights will depend on what is included in the company’s articles of association and (if there is one) the shareholders’ agreement.
The articles of association will typically cover issues such as shareholders’ voting rights and the process for buying, selling and transferring shares. A shareholders’ agreement will usually detail issues such as how decisions will be made between shareholders, protections for minority shareholders and the process for resolving shareholder disputes.
Where a shareholder dispute has arisen, it is recommended to seek specialist advice on your rights as a shareholder before taking any action. Articles of association and shareholders’ agreements tend to be long, complicated documents, which are not always as clearly written and easy to interpret as they might be. Specialist shareholder dispute help can, therefore, be essential to ensure shareholders understand their rights and options.
How can you resolve shareholder disputes?
There are various different approaches that can be used to resolve shareholder disputes, depending on the situation. Ideally, there would be a shareholders’ agreement that clearly sets out the process for resolving disputes, but this is not always the case or the process set out may not be adequate for the situation.
The process set out in a shareholders’ agreement will usually involve negotiations between shareholders to reach a suggested resolution to the point of conflict. Shareholders would then vote on a resolution. Even where the process is clear, it is still advisable to consult a legal expert before entering negotiations to ensure you are clear on your rights and what a good outcome for your interests and those of the business would look like.
If an agreement cannot be reached through the process set out in the shareholders’ agreement or there is no such process specified, then there are many other options you can explore. These include commercial mediation and arbitration, as well as buying out a shareholder who is at odds with the other shareholders, variation of rights to change what rights particular shareholders have and even splitting or selling the business if necessary.
In the most serious cases, it may be necessary to initiate court proceedings to achieve a resolution, but this is normally a last resort as this involve significant cost and time, as well as potentially harming your business.
How long does a shareholder dispute take?
There is no standard timeframe to resolving a shareholder dispute. Generally, shareholder disagreements can be resolved faster if you can negotiate a resolution privately with the help of an experienced legal adviser. If court proceedings are required, it is likely to take significantly longer.
Commercial mediation is often a popular option to resolve serious shareholder disputes as it can usually be completed in a day or less, giving you an acceptable outcome swiftly. At David W Harris, we support commercial mediation as part of our shareholder dispute resolution service, as well as being ready to advise and support you with all other appropriate options.
How do you remove a bad shareholder?
Ideally, the articles of association and/or shareholders’ agreement would include provision for removing individual shareholders who are at odds with the rest of the shareholders. Typically, this would involve buying out the “bad” shareholder based on a fair market valuation of their shares.
Where this is not possible, there are a range of other actions available to shareholders, including limiting another shareholder’s rights by varying the articles of association and/or shareholders’ agreement. In the most extreme situations, shareholders who collectively hold at least 75% of the company’s shares can decide to voluntarily liquidate the company and transfer its assets to a new company, without the problem shareholder.
Dealing with a difficult shareholder can be very challenging and, if the wrong approach is taken, it could harm the business or leave open the potential for legal action. You should therefore always seek expert legal advice before taking action.
Our shareholder dispute resolution fees
The cost of resolving shareholder disputes will depend on the circumstances. When you speak with our team, we will discuss your requirements and how we can help, including a breakdown of the likely costs involved for our shareholder advice services.
In some cases, we can provide shareholder dispute legal advice on a fixed fee basis, while in other cases, we will work based on a fixed hourly rate. Either way, you will have a clear idea of the cost of our services at the outset, with all expenditure agreed in advance.
Speak to our shareholder dispute solicitors in Swansea, Pontypridd and Talbot Green
To discuss your requirements with our friendly, sensitive shareholder dispute solicitors in South Wales, please get in touch.
Please use our simple online enquiry form to book a free initial chat with one of our expert solicitors. We respond promptly to all enquiries.