Partnership and shareholder disputes

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Partnership and shareholder disputes

Partnerships in the UK are governed by the Partnership Act 1890. Business partnership and shareholder conflicts can occur in various scenarios, spanning from disagreements on business tactics to accusations of misconduct. Such disputes can have a significant impact on a company’s stability and prosperity, presenting intricate challenges to address. Specialised UK law firms focusing on partnership and shareholder conflicts offer valuable support to affected parties, helping them to understand their rights and options and ultimately achieve a resolution that serves their utmost advantage.

Our panel of solicitors can help with

Our panel of solicitors and dispute lawyer can assist business owners in resolving disputes that occur in relation to their business. Some examples of why partnership disputes can arise and what we can assist with include:

Business strategy disagreements

Oppression of minority shareholders

Allegations of misconduct of a partner

Disputes over terms of partnerships or dissolution of the partnership

Deadlocks in management of a company

Unfair prejudice claims under the Companies Act

Breach of fiduciary duties of a partner

Derivative actions

Settling Partnership disputes

Partnership disputes in the UK can be resolved through various approaches, depending on the unique circumstances at hand. Several common methods that can be used to resolve disputes include:

  1. Negotiation and Mediation: Parties engage in informal discussions or seek assistance from a neutral third party (mediator) to reach a mutually agreeable resolution and partnership agreement.
  2. Arbitration: Disputes between business partners can opt for arbitration, an alternative dispute resolution method where an arbitrator or panel of arbitrators is entrusted with resolving the dispute.
  3. Litigation: If negotiation or mediation fails, parties may resort to litigation. This will initiate court proceedings in the High Court, which possesses jurisdiction over corporate and partnership disputes. Litigation is much more time consuming.
  4. Expert Determination: Parties may agree to have an expert, such as an accountant or valuer, determine the outcome of the dispute instead of involving a court or arbitrator.
  5. Compulsory purchase of shares: In cases involving claims of unfair prejudice by a shareholder, the court may order the company or other shareholders to purchase the complaining shareholder’s shares.

Ultimately, the choice of the most appropriate resolution method for a partnership or shareholder dispute hinges on the specific details of the case and the preferences of the involved parties. While some conflicts may be swiftly and informally resolved, others may require formal proceedings. It is essential to seek expert advice from a solicitor in order to determine which method would suit your case.

Why Choose us?

We only connect you with the best solicitors

All of the solicitors on our panel have the experience and expertise required when dealing with partnership disputes. Each solicitor is vetted before being allowed onto our panel and we only select the best in the business. They can provide you with the legal advice you require to achieve the optimal outcome on your case.

All of our solicitor firms and dispute resolution teams are authorised and regulated by the Solicitors Regulation Authority (SRA).

Cost effective options

Commercial solicitors in the UK typically charge by the hour, with rates ranging from around £150 to £350 per hour. Some panel firms may also offer fixed fee arrangements for specific services. The total cost will depend on the complexity of the work and the amount of time required.

Our legal teams also help with commercial claims, such as breach of contract and CCJ removal.

 

Frequently Asked Questions

What is a business strategy disagreement?

Partners or shareholders may have different ideas about how the company should be run, such as disputes regarding funding options or staff, leading to disagreements and tension within the company.

What are allegations of misconduct?

One business partner or shareholder may accuse another of misconduct, such as embezzlement or fraud, leading to a dispute.

What are deadlocks in management?

Shareholders or partners may be unable to reach a consensus on important decisions, leading to a deadlock in the management of the company.

What is a breach of fiduciary duty?

Shareholders or partners may accuse one another of breach of fiduciary duty, such as misusing company resources or failing to act in the best interests of the company.

What is oppression of minority shareholders?

Disputes between minority and majority shareholders are common. Majority shareholders and Senior Partners may be accused of oppressing minority shareholders by making decisions that are not in the best interests of the company or by denying them access to be able to share equally.

Dispute over terms of partnership or shareholders agreement

There can be a dispute over the interpretation or applicability of certain clauses in the partnership or shareholder agreement, both written agreements and otherwise.

What is an unfair prejudice claim?

An unfair prejudice claim is a legal remedy available under the Companies Act 2006 in the United Kingdom for shareholders of a company who have been treated unfairly by the company or by other shareholders. Such claim can be made by a shareholder if they believe that the affairs of the company are being conducted in a manner that is unfairly prejudicial to the interests of its shareholders generally or to the interests of that particular shareholder.

What is a derivative action?

A derivative action is a legal action that is brought by a shareholder of a company on behalf of the company, rather than in the shareholder’s own personal capacity. It is used to pursue a claim against third parties, typically company directors, for breach of their duties to the company, or against other shareholders or remaining partners for unfair prejudice.

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Please note, we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm. 

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