Written by Jess Nield
Shareholder disputes are complex, internal claims raised by shareholders. Broadly, a shareholders dispute can be between the Directors and Shareholders of a company or trust or between any partners of a partnership. As a company is a separate legal identity, a company may sue or be sued by its Directors or Shareholders but in the majority of cases it is the company who makes the claim.
These disputes are made more complicated by the different rights of Directors and Shareholders, which for every company are outlined in their unique Articles of Association.
Within a company, as it is normally the Directors who control the daily management of a company they have the right to make any changes, of which the most important decisions must, in most cases, be referred to the Board of Shareholders to be voted on. In accordance with the law, Directors have a duty to always act in good faith, keeping best interests of the company in mind. However, when this does not happen the Shareholders have the power to claim against them in the name of the company, as a result of their legal and personal rights which grant them ultimate power over the Directors.
Due to the importance of the Articles of Association in shareholder disputes the possible options for proceeding with a claim greatly depend on the circumstances and the individual company but there are always options available. Alison Rocca or Hannah Vachre, solicitors in our commercial litigation department, can help you look at our options if you find yourself in a dispute.
Edited by Alison Rocca