Shareholder Dispute Solicitors - Our Panel of Experts

Partnership and shareholder conflicts may emerge in various scenarios, ranging from differences in business strategy to accusations of wrongdoing. These disputes carry the potential to significantly affect a company’s stability and success, presenting a difficult challenge to address.

UK legal firms specialised in handling partnership and shareholder disputes offer invaluable support to companies and individuals involved in such conflicts. Their expertise helps clients to understand their rights and explore their options, ultimately helping them to reach a resolution that is in their best interests.

It is in the best interest of the company to resolve a shareholder dispute in an effective and timely manner. Expert Commercial Law has a panel of partnership and shareholder dispute solicitors on hand to assist partner, directors and shareholders with shareholder dispute resolution by providing transparent legal advice and assistance in the most cost effective manner.

Types of shareholder disputes

Shareholder conflicts can occur at various stages of a business for different reasons. Key types of shareholder disputes include:

  1. Partnership Disputes – These conflicts can arise within any partnership, triggered by disagreements over partnership allocation when one partner wants to leave the partnership, or during the equitable winding down process. These situations pose potential challenges and complexities for the business and remaining partners.
  2. 50/50 Shareholder Deadlocks – Disputes often occur in the absence of a drafted shareholders’ agreement. When there are no minority and majority shareholders, disagreements may arise, particularly when minority shareholders are tasked with crucial business decisions, lacking a majority vote.
  3. Unfair Prejudice Claims – When shareholders believe that there has been unfair conduct in the company’s affairs that could affect their interests, majority shareholders can file an unfair prejudice petition under Part 30 of the Companies Act 2006. Through legal proceedings, an order may be sought to allow the affected shareholder to be effectively “bought out” by the company or other shareholders.
  4. Funding Disagreements – Disputes related to business funding are common, especially in the absence of a clear agreement on how the business will be funded beyond initial shareholder contributions.
  1. Breaches of Fiduciary Duties – Conflicts may stem from a director’s breach of duties, leading to derivative actions such as fraud or misfeasance claims.

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 for unfair prejudice.

Ways to mitigate and manage shareholder risks

Establish transparent communication from the outset. Regularly update all shareholders on the company’s financial needs. It is particularly vital to avoid any perception of concealing crucial information from shareholders, as such actions could potentially extend the timeframe for filing claims.

Maintain thorough record-keeping related to decision-making processes and carefully scrutinise articles and essential documents, including shareholders’ agreements. This involves a detailed review of all required consents and approvals for proposed changes to articles or agreements.

Evaluate the potential impact of proposed investments or changes to shareholder rights on each class of existing shareholders. Consider offering participation rights beyond the minimum requirements to mitigate the risk of complaints.

Address conflicts of interest openly and document them meticulously, especially when the board is predominantly composed of majority shareholders or their representatives.

Settling shareholder disputes

Partnership and shareholder disputes in the UK can be settled in a variety of ways, depending on the specific circumstances of the case. Some common methods of resolving these disputes include:

  1. Negotiation and Mediation: The parties may attempt to reach a resolution through informal negotiations or through mediation, which is a process where an impartial third party (mediator) helps the parties to reach a mutually acceptable agreement.
  2. Arbitration: The parties may choose to submit their dispute to arbitration, which is a form of alternative dispute resolution where the parties agree to have their dispute resolved by an arbitrator or a panel of arbitrators.
  3. Commercial Litigation: If the parties are unable to reach a resolution through negotiation or mediation, they may choose to litigate the dispute in court proceedings. In the UK, the High Court has the jurisdiction to hear disputes involving companies and partnership.
  4. Expert Determination: The parties may agree to have the dispute determined by an expert, such as an accountant or a valuer, rather than by a court or an arbitrator.
  5. Compulsory purchase of shares: In the case of unfair prejudice claim by a shareholder, the court may order the purchase of the shares of the complaining shareholder by the company or by the other shareholders.

Ultimately, the appropriate method of resolving a partnership or shareholder dispute will depend on the specific facts of the case and the preferences of the parties involved. Some disputes may be resolved quickly and informally, while others may require more formal and lengthy proceedings.

The role of shareholder dispute solicitors

A shareholder dispute solicitor from our panel can help you with a shareholder dispute in several way:

  • Representation in court: If negotiations are unsuccessful, a solicitor can represent the client in court, present the case, call and cross-examine witnesses, and make legal arguments on their client’s behalf.
  • Drafting legal documents: A solicitor can help draft legal documents such as letters of claim, statements of case, and witness statements, which are required for court proceedings.

  • Advising on the process and the outcome: A solicitor can advise on the court process, the possible outcome and the costs involved.

  • Advising on alternative dispute resolution methods: A solicitor can advise on alternative dispute resolution (ADR) methods to resolve the dispute. This may include mediation or arbitration, which may be more cost effectively efficient than court proceedings.

It is worth noting that a solicitor with expertise in shareholder law can provide guidance throughout the process and can help protect the client’s rights and interests. They can also help evaluate the strength of the case and advise on the best course of action.  If you need help with a shareholder dispute, speak to us today.

Why choose us?

We only connect you with the best solicitors

All of the shareholder dispute solicitors on our panel have the experience and expertise required to take on your case. Each solicitor is vetted before being allowed onto our panel, and we only select the best in the business. All of our solicitor firms 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 solicitors can also help with commercial claims, such as breach of contract and CCJ removal.

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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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