How to Resolve a Shareholder Dispute

A shareholder dispute can be a difficult and complicated process. Businesses need to understand the ins and outs of resolving a shareholder dispute to make the process as smooth as possible.

However, there are three simple steps that can help to resolve a shareholder dispute. This post will also provide information on what to expect during the process and how businesses can best navigate it.

What is a Shareholder Dispute?

A shareholder dispute is a disagreement between two or more company shareholders. 

This type of dispute can arise for various reasons, including disagreements over the company’s direction, poor relationships, how profits are distributed, or management issues.

Shareholder disputes can often be complex and difficult to resolve, as they involve not only the interests of the shareholders involved but also the interests of the company as a whole. This type of dispute can significantly impact the operations and reputation of a business and should therefore be handled carefully and with caution.

There are a few different ways to resolve a shareholder dispute. 

The most common way is through mediation, which is where an impartial third party assists the shareholders in coming to an agreement. 

Alternatively, arbitration may be used, where an arbitrator makes a binding decision. In some cases, shareholder disputes may also be resolved through litigation, which is where the dispute is brought before a court of law.

How to Resolve a Shareholder Dispute?

Step #1 – Figure Out the Issues

The first step that needs to be taken to resolve a shareholder dispute is to identify the problem. 

This can be done by looking at the shareholders’ agreement or by speaking with the shareholders themselves. Once the problem has been identified, it’s important to try and resolve it amicably between the parties involved. 

Step #2 – Get Legal Advice

The next step in resolving a shareholder dispute is to get legal advice. 

This can be done by speaking with a lawyer, or by hiring Sydney lawyers for commercial litigation, or by attending a mediation session. Mediation sessions are often helpful in resolving shareholder disputes, as they provide an opportunity for the parties involved to discuss the problem in a neutral setting.

Within these mediation sessions, you’ll find things like:

• both parties will have the opportunity to state their case,
• there will be an open discussion about the issues at hand,
• a resolution will be sought that is acceptable to both parties, and
• the mediator will assist in agreeing.

If mediation is unsuccessful, then arbitration or litigation may be necessary.

Step #3 – Take Legal Action

If mediation is not possible, or if it is unsuccessful, then the next step is to take legal action. This can be done by filing a lawsuit or by going to arbitration. 

Arbitration is often seen as a more informal way of resolving shareholder disputes, and it can be faster and less expensive than going to court. However, it’s important to note that arbitration is not always successful, and it may not be the best option for every business.

Summary

Shareholder disputes can be difficult and complicated affairs. Businesses need to understand the steps that need to be taken to resolve a shareholder dispute, so you know exactly where you’re at and what the steps are. 

Remember, each case can have individual circumstances you need to consider, and your best bet is to seek legal advice who can look into what’s going on and what opportunities are available to you.