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What could cause a shareholder dispute?

Businesses are subject to legal challenges from a broad spectrum. As well as problems arising from external issues, they must also be on guard for problems from within. One of these areas being the shareholders.

People who buy into a company do so with certain expectations, which may or may not be realistic. Their expectations and the decisions they would take may differ significantly from the other shareholders and those who manage the company. The money at stake in decisions can exacerbate people’s differences and lead to legal challenges from one party to another.

Minority shareholders need to feel their voice is heard

Just because someone only takes a small stake in a company does not mean they are happy for the majority shareholders to do as they please. Remember that when added together, the minority shareholders can amount to a considerable percentage of the overall investment, and they are entitled to have their voices heard. If a business founder only reluctantly released shares because they were desperate for an influx of cash, they may be unwilling to let go of the complete control they once had. This can lead to problems.

Clarity is crucial

Shareholder agreements need to be clear from the outset. Those within the company must be transparent about the actions they carry out, remembering that whatever their position once was, as soon as they take on shareholders, they have a responsibility toward them.

If you are experiencing internal conflict with shareholders, or have issues with those in charge of the day-to-day running of the company you invested in, you may need to learn more about your legal options to seek a satisfactory resolution.