Legal advice on shareholder disputes
Just as in a good marriage, there are often differences of opinion between shareholders. The reasons for this are as varied as life itself. The individual interests of the shareholders, as well as the interests of the company itself, must be reconciled. This is often not entirely straightforward, particularly when the discussion becomes emotionally charged. We can help you identify potential sources of conflict at an early stage and draw up appropriate agreements to prevent disputes from arising in the first place. Should a dispute have already arisen, we will help you resolve it whilst safeguarding your interests as effectively as possible.
Conflict prevention
The most elegant way to resolve conflicts is, of course, to prevent them from arising in the first place. By drafting the articles of association and any shareholders’ agreements in a forward-looking and prudent manner, clear rules can be established for specific scenarios, providing the parties with a set of tools for dealing with potential conflicts. After all, in the event of a dispute, arguments tend to be very formal.
Particular attention must be paid here to the provisions governing who within the company has what powers of influence and decision-making. This is where important ground is laid. For example, minority shareholders can be given greater protection through provisions requiring their consent for certain legal transactions. Similarly, certain legal positions may be granted under the articles of association which can only be revoked with the consent of the person concerned. For example, it may be stipulated that a particular shareholder shall always serve as the company’s managing director or shall always be entitled to appoint a member to the advisory board.
Amicable dispute resolution
Even with the best contractual arrangements, disagreements cannot be ruled out. Experience shows that it is advisable to first make a genuine effort to reach an amicable solution. Resolving the matter through the courts or arbitration is nerve-wracking, time-consuming and expensive for everyone involved. And when shareholders are in dispute, the company’s day-to-day operations usually suffer as a result.
In order to reach an amicable solution, it is of fundamental importance first to understand your own legal position and how this could be enforced in contentious proceedings. We can help you to assess the complex facts from a legal perspective and to clarify the legal positions of both you and the other parties involved. If you wish, we can assist you in negotiating and implementing an amicable solution.
Contested pursuit of one’s own interests
If an amicable resolution of the dispute proves impossible, we will utilise the available legal means to safeguard the client’s interests to the greatest possible extent. Working alongside you, we will develop appropriate strategies and support you through the turbulent period of the shareholders’ dispute.