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Practicalities of a Dispute

We can advise you on what steps to take to prepare for shareholder disputes.

There are a variety of vital steps you should take when entering a shareholder dispute and knowing what these are can lead to a successful outcome.

Firstly, you need to secure company assets and protect them from other shareholders. This may mean double checking (or changing) the company bank mandate, for example. You should also carry out checks to ensure company monies haven't been paid to lawyers to fund the battle ahead.

It is key to secure access to any information or documentation which could prove vital to proving your case. It is not uncommon for documents and files which hold this information to mysteriously 'go missing'. You may also need to consider regulating access to the Company’s premises to secure the information needed.

It may prove difficult to take these steps without holding a controlling majority shareholding. The real power to take these steps lies with those who control the board of directors, so securing control of the Board will be key to taking care of the practicalities.

Also, at the outset of shareholder disputes, there is often confusion over precisely what rules govern the company in question, and there may be arguments about what has gone on in the company's past.

Many of the answers to these matters will be found in the company's articles of association and its statutory books and records, which should always be checked immediately.

For director shareholders who feel aggrieved or excluded by the actions of their fellow directors, one common mistake is that they resign their directorship prematurely. Whilst there are occasions where resignation as a director may be appropriate, in most cases it can be a serious tactical error, not least because non directors have only limited access to Company records or information.

Our team know how to help shareholders take care of these practicalities, and protect themselves and their interests whether in an expected or unexpected dispute.