Break Away From The Pack

What causes shareholder disputes? 

On Behalf of | Aug 28, 2022 | Business And Commercial Litigation |

Shareholders are individuals who own stocks in a company. The number of stocks per person generally varies, with the company having major shareholders and minority shareholders. 

Nonetheless, it’s important that all shareholders feel respected and are treated within the confines of the law. A shareholder dispute can disrupt the productivity of a company significantly. Outlined below are some of the more common causes of shareholder disputes. 

Not having similar visions 

The one thing all shareholders can agree on is that they want the company to be profitable. Unfortunately, there is not always harmony among shareholders on how to get there. 

Disputes on hiring new staff, or getting rid of current employees, investing more capital and changing location are some of the more common shareholder disagreements. It’s important that those within the company are able to find a solution or compromise for the sake of the company. 

Minority shareholders feeling ostracized 

The majority of companies treat all their shareholders with respect, but there are cases where minority shareholders are treated less favorably. 

When minority shareholders feel ostracized, they can group together and take legal action against the company and gain what they believe to be a fairer share of the corporate benefits. 

Disputes between shareholders can be very disruptive for your company and it’s best if you can avoid them. Sometimes, this simply isn’t possible though, no matter what precautions you take. If your company currently has a dispute among shareholders, it’s in your best interests to resolve it quickly. Seeking legal guidance will give you the best chance of doing this.