Company Disputes

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Types of Company Disputes:

Shareholder Differences

Typically, there is a tussle for control over the business arising from a good relationship turning sour and shareholders refusing to co-operate with each other. In order to determine a shareholders’ exit rights in relation to a private company, a lawyer may have to investigate the exit clauses in the Shareholder’s Agreement.  

Breach Of Duty As Director

There may be occasions where a director is not acting in the interests of the other shareholders or the company as a whole, or where there is a breach of fiduciary duties by the director.

 

A shareholder who is also a director may carry out acts that hamper access of another shareholder to the accounts, business operations or decision-making affairs of the company. Such actions may constitute  breaches of director’s duties and could even be an offence in certain circumstances. 

Deadlock & Business Standstill

Parties may be deadlocked and the business may run into a stalled position where disputing parties own an equal number of shares and have equal voting power and neither party is prepared to compromise.

The investor wishes at the very least for recovery of the amount that he has invested, but sometimes the business has suffered a considerable loss and there is a need to then consider how best the investor may exit the situation with minimal loss.

Options For Resolving A Shareholders’ Dispute

The various options include offering to buy out a party, appointing an auditor to look through the accounts and to do up a valuation of the shares of the Company, voluntary liquidation and the appointment of a liquidator, attending a mediation session to explore ways of settlement, and in the last resort, the winding up of the Company.

Hoh Law Corporation may help you:

  • Assess the facts and identify the issues

  • Advise you on what steps to take to protect your interests

  • Appoint accounting professionals to analyse all financial records

  • Advise you on the best form of dispute resolution to take

  • Prepare you for potential litigation /arbitration / mediation, depending on the circumstances of the case.

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