How to Efficiently Handle Shareholder Disputes

Shareholder disputes are an inevitable part of business. No matter what precautions are taken, they are a natural part of business and can often pop up from time to time. Common causes of these disputes include issues over the company’s strategy, dividends, salaries, shareholder prices, buy/sell agreements, etc.

However, the fact of inevitability of shareholder disputes should not prevent a company or business from exploring ways to manage those disputes if or when they do occur.

A failure to adequately prepare for these disputes may call the integrity and future of the business into doubt. This is especially as shareholder disputes affect more than the relationship between the shareholders and the board. They have great impact on the company’s reputation, can be time wasting and often take up valuable resources.

It’s clearly in the best interest of your company to do all it can to plan properly for the inevitable event of shareholder disputes and their effective management.

How Do You Plan for a Shareholder Dispute?

There are two very important factors that every company needs to take into account when planning for shareholder disputes. These determine how well the company can respond to and manage the disputes.

The first is preparation of an effective, custom shareholder agreement. The shareholder agreement is an effective tool that limits the possibility of open disputes to the barest minimum.

For it to be effective, it must contain details about shareholder responsibilities, specific actions for future situations and in depth outlining of company structure. It should also provide for quiet, efficient dispute resolution mechanisms in the event of future disputes.

The second is retention of competent legal counsel to help draft the shareholder agreement and provide ongoing proactive counsel on how to tackle everyday issues so they don’t escalate into full blown disputes.

The business lawyers at Jurado & Farshchian, P.L. have immense experience assisting clients in this respect. In our years of practice in this area, we have discovered that early and quiet intervention is the best way to prevent full blown shareholder disputes and protect against unmanageable situation in the future.

In this regard, we have helped many of business clients build firm foundations for good corporate governance through smart advice and detailed shareholder agreements.

In the event that disputes do eventually break out, we understand that litigation can be costly and should be regarded as the last resort. The firm actively seeks all other collaborative means of facilitating rich settlement of disputes so that your business relationship is preserved.

However, our law firm is also willing and experienced at litigating shareholder disputes even up to appeal should the situation call for it. Our aim is to provide with the most comprehensive solution for your particular issues.