A Shareholder Dispute typically involves a dispute between shareholders of a propriety limited company. It can also include:
- Disputes between shareholders (and directors) within publicly listed companies, unlisted and proprietary limited companies;
- Partnership disputes; and
- Various disputes using trusts (for example, unit trusts).
The central theme in shareholder disputes is control and a disagreement about management. Disagreements can occur when shareholders object to the proposed direction of the company or when shareholders perceive they are doing more than their fair share of the work in the company.
The Corporations Act regulates the behaviour of directors and members of corporations and provides remedies for “oppressed” minority shareholders to seek assistance from the court to protect their legitimate legal interests. The Constitution and Shareholder’s Agreement provides the foundation of how disputes will be managed.
Agreements between shareholders need to be clearly documented in a shareholders’ agreement which should include a dispute resolution clause, along with governance guidelines. This gives shareholders a clear understanding of where they stand and what they are required to do.
Clarity in the documentation is vital to ensure that a shareholder dispute does not lead to costly litigation.
If you are involved in a shareholder dispute, you should seek expert advice from a commercial lawyer with experience in this area. Streeterlaw Sydney’s dispute resolution lawyers can advise you on the best way forward, whether it be mediation, negotiation or litigation.
Please contact our office now to obtain advice on what is appropriate in your circumstances. Call 8197 0105 or email firstname.lastname@example.org.