Company Disputes
Operating a business is a gratifying endeavor, yet it comes with its share of challenges. Collaborating with fellow directors, partners, and shareholders accelerates business growth, but what happens when disagreements arise among you?
Recognising that not every aspect goes according to plan, and the weight of statutory obligations, as well as the safeguarding of business interests, can occasionally lead to company disputes, our commercial litigation team steps in.
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With years of experience, we adeptly and discreetly handle and resolve director, partnership, and shareholder disputes. We swiftly identify potential issues and offer professional guidance, striving to avoid court proceedings whenever possible and ensuring your business stays on course.
We consistently advocate for the establishment of partnership or shareholders’ agreements as a preventive measure, as these can significantly expedite dispute resolutions. Whether such agreements are in place or not, our team efficiently collaborates with you to identify problems, assess your desired outcomes, and proactively advise on available options. Considering putting a partnership or shareholders’ agreement in place? Learn more about our services.
Prompt resolutions are instrumental in preventing business standstills, and our team prioritises settling disputes in a manner that enables all parties to move forward.
Supported by corporate and commercial practitioners, our commercial litigation team at Arlingsworth provides a comprehensive solution for managing your director, partnership, or shareholder dispute. This includes facilitating share transfers or sales if necessary to finalise negotiations.
Our services include:
- Derivative actions
- Misfeasance
- Unfair prejudice
- Removing a director from office
- Ending or dissolving a company or partnership
- Preparing shareholder agreements
- Preparing board minutes and resolutions
Company disputes arise when directors, shareholders, or business partners disagree on key business decisions, financial matters, or legal obligations. These disputes can involve breach of fiduciary duties, shareholder disagreements, mismanagement, or contract breaches.
The most common reasons for business disputes include:
- Director disputes – Conflicts over management, strategy, or misconduct.
- Shareholder disputes – Disagreements on dividends, voting rights, or share transfers.
- Breach of fiduciary duty – A director failing to act in the best interests of the company.
- Partnership disputes – Disagreements over profit-sharing, decision-making, or partner exit strategies.
- Contractual breaches – One party failing to fulfil legal obligations.
Company disputes can be settled through:
- Negotiation – Discussing concerns informally to reach a resolution.
- Mediation – A neutral third party helps facilitate an agreement.
- Arbitration – A legally binding resolution outside of court.
- Litigation – Pursuing legal action in court if other methods fail.
- Derivative actions – Shareholders taking legal action on behalf of the company against directors.
Yes, in certain circumstances, a shareholder can be removed, particularly if:
- The company’s Articles of Association or a Shareholders’ Agreement allow for it.
- There is evidence of unfair prejudice against minority shareholders.
- The shareholder has committed a breach of contract or fiduciary duty.
Legal action may be necessary if the dispute cannot be resolved amicably.
Minority shareholders have statutory protections under the Companies Act 2006, including:
- Protection from unfair prejudice (Section 994) if majority shareholders act unfairly.
- Derivative claims against directors for misconduct.
- Right to be informed of major company decisions.
- Ability to request company records and financial reports.
Legal advice is crucial in protecting these rights.
If directors reach a deadlock and cannot agree on critical business decisions, possible solutions include:
- Referring to a shareholders’ agreement for pre-agreed resolution mechanisms.
- Appointing an independent mediator or arbitrator.
- Selling shares or restructuring the company.
- Winding up the company as a last resort.
Arlingsworth Solicitors provide expert guidance on resolving director, shareholder, and partnership disputes through mediation, negotiation, arbitration, and litigation. Their commercial litigation team ensures businesses are protected while pursuing the best resolution strategy.
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