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Shareholder Disputes

Shareholder Dispute Resolution

The most effective way to ensure that disagreements do not cause your shareholders to lose confidence in a business is to have a well drafted shareholder agreement in place at the commencement of a business or at the introduction of a shareholder’s investment. If a shareholder agreement lacks clear direction on dispute resolution, Australian legislation such as the Corporations Act 2001 (Cth) can aid in resolving a dispute. Our litigation and dispute resolution team at Ramsden Lawyers can guide you through your shareholder dispute whether you are a plaintiff or defendant in the dispute.

Who is a shareholder?

A shareholder is someone who owns shares of stock in a company and is an integral part of a company. While not required at law, it is generally good practice for a company to have a shareholder agreement. A shareholder agreement will be the first point of information to shareholders. Additionally, the company’s constitution should set out how disputes are to be resolved. If the company does not have a constitution, the ‘replaceable rules’ apply. Failing this, the Corporations Act 2001 imposes fiduciary duties on the directors of companies and other obligations that may be relevant in shareholder disputes.

How can a shareholder dispute arise?

Shareholder disputes arise over a number of issues including:

  • Disagreement over business decisions;
  • Unequal positioning of minority shareholders;
  • Oppression of minority shareholders;
  • Unequal distribution to shareholders;
  • Failure to pay dividends;
  • Wrongful transfers;
  • Wrongful acquisitions; and
  • Fraud.

Litigation and dispute resolution

The litigation and dispute resolution team at Ramsden Lawyers have extensive experience in the area of shareholder disputes and are here to assist you.

Usually, shareholder disputes can be resolved by following the dispute resolution process set out in the shareholder agreement or company constitution. However, not all shareholder disputes can be resolved this way, at which time it may be necessary to pursue other means of resolving the dispute such as Alternative Dispute Resolution (ADR) or court proceedings.

Our team can help facilitate the resolution of a shareholder dispute through ADR including:

Negotiation: either formal or informal, between the parties, with or without legal representation.
Mediation: an independent mediator helps guide the parties to resolve the dispute. The opinion of the mediator is generally non-binding.
Arbitration: an independent arbitrator decides the dispute. The decision of the arbitrator is generally legally binding.

How our legal team can help

Lead by Litigation Partner, Derek Finch, you can be assured that the litigation and dispute resolution team will utilize their skills and experience in the area to reach a cost-effective and timely solution. Contact us today on 1300 749 709 to schedule a consultation at our Gold Coast, Sydney or Brisbane offices.

For further information on Shareholding see:

ComLaw – the Corporations Act 2001 (Cth).

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