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Preventing and Handling Shareholder Disputes with the Help of a Business Attorney

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Shareholder disputes come in many forms and litigation is a highly complicated area of the law. That is why business owners must have a litigator at their side who understands the law and has expertise in this area. The best Nashville business attorneys litigate complex disputes that involve privately held corporations, LLCs, and other related entities. Such disputes cover different issues related to corporate management and operations. Litigating shareholder disputes can be a long haul and a good attorney is willing to do the distance when necessary. 

Common Causes of Shareholder Disputes

Shareholder disputes happen when shareholders disagree in terms of corporate governance or some important details about the operations, finances, and other aspects of a company. These disputes can arise because of the following:

  • Breach of the shareholder agreement. Shareholders can have disputes over a sale of shares that violates the agreement, especially when the sale is made to a rival or competitor. Other shareholder breaches include a shareholder wanting to terminate the entire agreement against other shareholders’ wishes. 
  • Fiduciary misdeeds. Privately-held corporations’ shareholders have fiduciary duties to each other no matter where the business employs them. They are at least required to deal with each other honestly with candor and loyalty. But, major disputes can be triggered when shareholders have conflicts of interest with other shareholders or withhold important financial information from others. 
  • Business management disagreement. Shareholders of a company may have an issue with how the owner decides to run the company or if they decide to take in a new direction. Usually, this dispute takes place in a smaller, family-owned business. Sometimes, shareholders will have conflict over big purchases or new employee posts.

What Business Owners Do to Handle Disputes

Business owners should be prepared to handle disputes in advance to get on top of them right away instead of allowing them to drag on or escalate.  A reliable business attorney can set up an agreement in terms of the steps to take if and when shareholder disputes occur. Having a legal agreement will make sure that the dispute is settled quickly. 

A company director or owner should understand their role in the business, their rights, and their responsibilities. And they have to carry these out to the best of their ability. They are expected to be transparent in what they do and plan to do, communicate clearly with the other management and shareholders so these people will know what to expect. This can help reduce and resolve shareholder disputes quickly and responsibly. 

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