When a person or entity acquires shares of a company, there is a financial relationship. Through this investment, shareholders benefit from the enterprise’s profits and experience its losses. Often, the shareholder/business relationship will function without incident. However, there can be circumstances when shareholders will take issue with the company or each other. In that circumstance, the company or shareholders may need to address the complaint to resolve the problem. Here is more about settling a shareholder dispute.
Shareholder Agreements
A shareholder agreement is a contract between shareholders that sets out the operational and management structure of the company. The document also establishes the identity of the parties and explains their respective rights and responsibilities. In addition, shareholder agreements often identify potential sources of conflict and provide ways to resolve related disputes.
Shareholder agreements are essential, and it’s important that they are drafted according to the law and with the needs of the business taken into consideration. Having a carefully created shareholder agreement is essential and can help minimize risk and liability. If your organization needs a shareholder agreement, you should contact an experienced Florida business attorney to draft your document.
Shareholder Disputes
Shareholder disputes can arise in a variety of contexts. Sometimes, the issue will be between shareholders. There can also be times when shareholders have concerns about the business and its governance. The perceived problem may be relatively minor. However, there can also be times when shareholders believe it’s necessary to file a lawsuit to protect their interests. In both situations, it’s essential to try and address the problem before it escalates.
Reasons for Shareholder Disputes
Shareholders have a financial interest in the business. When that interest is threatened, the situation can quickly become serious and potentially litigious. Some of the reasons for shareholder disputes include but are not limited to claims involving:
Breach of Contract—Breach disputes typically involve alleged shareholder agreement violations. These may concern shareholders complaining that there has been non-compliance with the agreement. Breach disputes can also involve shareholders improperly transferring or selling their shares or a shareholder seeking to terminate the governing agreement.
Mismanagement—Mismanagement complaints typically concern shareholders alleging that the company’s leadership is lacking in its performance. These complaints may involve questioning leadership decisions, spending, and other related claims.
Conflict of Interest—Conflict of interest disputes often involve shareholders alleging that someone in charge at the company has made a decision that violates their fiduciary duty. When management engages in this type of activity, it can harm the company and shareholders.
Misinformation—Misinformation complaints generally involve shareholders believing that company management has failed to provide them with important data or details.
Unlawful Conduct—Unlawful conduct allegations typically concern claims that there has been embezzlement, fraud, or other illegal activity.
Minority Shareholders—Minority shareholder complaints are those claims involving these individuals being harmed by the majority shareholders or denied access to records or information.
Shareholder disputes have the potential to become complicated. Therefore, it’s important to take action right away to evaluate the concern. The best way to examine a shareholder issue is by consulting with an experienced Florida business attorney. Your business lawyer can help you review your shareholder dispute and understand your options.
Contact an Experienced Florida Business Attorney
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.