Shareholder disputes can wreak havoc on a business. Resolving any disputes in a timely manner is crucial to keeping your business running. Disputes can create disruptions in business operations, especially in smaller companies.
Shareholder disputes can arise for several reasons, but they most often stem from disagreements over the direction of the company or personality conflicts. One common type of shareholder dispute is when one party wants to sell the company, while the other wants to keep it and expand it. This can often lead to a power struggle between the two parties and can be difficult to resolve.
Another common type of shareholder dispute is when two or more shareholders cannot agree on how to run the company. This can lead to disagreements over strategy, hiring and firing decisions, and allocation of resources. These disputes can be very costly and time-consuming for the company and often result in a lot of animosity between the shareholders involved.
Personality conflicts are also a common cause of shareholder disputes. When shareholders have distinct personalities or agendas, it can often lead to conflict. This can be especially true if one party feels they are not being heard or their concerns are not being taken seriously by the other shareholders.
Fortunately, there are a few things that shareholders can do in order to resolve a dispute. The first step is to review the shareholder agreement if there is one. The shareholder agreement often provides direction on the steps to take during a dispute.
If there is not a shareholder agreement, additional steps may be required:
- Reviewing company articles or other governing documents.
- Passing a resolution at a general meeting to resolve the dispute.
- Removing a director.
- Mediation or arbitration.
Shareholder Rights
When it comes to resolving shareholder disputes, it is important to know and understand the shareholder rights. The most common right that shareholders have is the right to vote. This right allows shareholders to have a say in how their company is run.
Other shareholder rights include the right to receive information about the company and inspect company documents. This process can alleviate disputes in some cases, especially where a lack of information is key to the dispute.
All of these rights are important in resolving conflicts. For example, if a shareholder feels that the company is not being run properly, they can sue the company. If a shareholder feels they are not being given enough information about the company, they can move to have the company provide them with more information.
Philadelphia Shareholder Dispute Lawyer at The Gold Law Firm P.C. Can Help Your Business Stay Compliant
If you are battling a shareholder dispute, you may need legal assistance. Contact our skilled Philadelphia shareholder dispute lawyer at The Gold Law Firm P.C. to learn how we can protect your business and rights. Call us at 215-569-1999 or contact us online to schedule a free consultation. With offices in Philadelphia and Pennsauken, New Jersey, we proudly serve clients in South Jersey and Southeastern Pennsylvania, including Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Lehigh County, and Montgomery County.
