Director and shareholder disputes guide

Shareholder and director disputes can arise in several ways, usually stemming from disagreements about decisions or the company’s strategy.

In our experience, you can settle most shareholder and director disputes without resorting to expensive litigation, but the key is understanding your legal position as a starting point for negotiations.

Our concise guide provides you with an overview of how to resolve shareholder and director disputes, steering you through smart ways to settle issues without resorting to legal action. This way, you save both the time and money associated with court proceedings.

For shareholders, we look at the importance of having a shareholders’ agreement to regulate your relationship with other shareholders and explore why the size of your share does matter when it comes to your power to make business decisions. These key considerations are just as important if you have gone into business with family and friends.

The guide also explains how proving ‘unfair prejudice’ could work in your favour, regardless of your investment in the business, as well as unpicking the circumstances where you might be able to use ‘derivative action’ against the company itself in your capacity as a shareholder.

We also walk you through potential ways to solve director disputes by considering the legal duties that they have to a company and the solutions available to you, as a director, if you wish to challenge a perceived breach of duty. Finally, we tackle how you go about breaking a deadlock where decision making has effectively reached an impasse.