Shareholder Dispute Lawyers Sydney
Shareholder disputes may occur due to varying factors and need to be handled tactfully. At Heathfield Grosvenor, we assist our clients to resolve issues expeditiously before they escalate further.
As a shareholder, you have a committed interest in the success of your business. Sometimes, however, you and your business partner might disagree on matters concerning your company.
If you have a shareholder’s agreement in place, then this will typically result in a quicker outcome.
In circumstances where there is no shareholder’s agreement in place, it is often the case that neither party can coerce the other to sell shares. We can advise you on your options and put in place an effective strategy. Frequently these disputes involve disagreement as to the valuation of the shares to be purchased by the company or another shareholder as the case may be.
Company dispute lawyers
The directors, shareholders, and company are separate legal entities. Whilst shareholders own the company, directors control and manage it. Since there several parties involved sometimes with competing interest, this often leads to friction.
Director dispute lawyers Sydney
Director disputes in Australia commonly occur due to several reasons, often related to breaches of director’s duties or other misconduct. Here are some common scenarios:
Breach of Fiduciary Duties: Directors owe fiduciary duties to the company, including loyalty, good faith, and acting in the company’s best interests. Breaches of these duties can lead to disputes.
Breach of Statutory Duties: Under the Corporations Act 2001 (Cth), directors have statutory duties such as acting with care and diligence, acting in good faith, and not improperly using their position. Breaches of these duties can result in disputes.
Misappropriation of Company Assets: Disputes may arise if a director misappropriates company assets for personal gain.
Conflict of Interest: Directors must avoid conflicts of interest. Engaging in activities that conflict with the company’s interests without proper disclosure can lead to disputes.
Oppression of Minority Shareholders: Conduct that is oppressive, unfairly prejudicial, or discriminatory against a minority shareholder can lead to disputes. This is a common cause of action under Section 232 of the Corporations Act 2001 (Cth).
Negligence: Disputes can occur if a director’s negligent actions harm the company.
Fraud: Fraudulent activities by a director can also be grounds for disputes.
Remuneration: There is a dispute about the remuneration of a director or ultimately the dividends paid to a shareholder.
Shareholder dispute lawyers Sydney
Shareholder disputes in Australia commonly occur due to several reasons, often related to breaches of agreements or unfair practices. Here are some common scenarios:
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Breach of Shareholders Agreement: Disputes can arise when the terms of a shareholders agreement are breached. This can include issues related to voting rights, dividend distribution, or management decisions.
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Oppression of Minority Shareholders: Conduct that is oppressive, unfairly prejudicial, or discriminatory against minority shareholders can lead to disputes. This is a common cause of action under Section 232 of the Corporations Act 2001 (Cth).
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Misappropriation of Company Assets: If a director or majority shareholder misappropriates company assets for personal gain, it can lead to disputes with other shareholders.
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Conflict of Interest: Shareholders may dispute if directors engage in activities that conflict with the company’s interests without proper disclosure and approval.
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Negligence or Mismanagement: Disputes can occur if shareholders believe that the company’s management is negligent or mismanaging the company, leading to financial losses.
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Fraud: Fraudulent activities by directors or majority shareholders can also be grounds for disputes.
Oppression claims, particularly those involving minority shareholders, are among the most common causes of action. The case of Jolan Pty Ltd v Essential Investments Pty Ltd (No 2) [2021] FCA 1533 is a key case illustrating oppression, where systematic exclusion from management and unilateral decision-making were deemed oppressive.
How to Remove a Shareholder or Director from a Company in Australia
When it comes to removing a shareholder or director from a company, you must be aware of the terms of any shareholder’s agreement, the compulsory legal processes and the requirements of your company’s specific constitution.
You should seek expert legal counsel to ensure you meet all requirements.
Shareholder Dispute Resolution & Remedies
There are potentially several methods of shareholder dispute resolution and common issues that arise in connection with the same. These include:
- Derivative actions;
- Actions based on conduct which constitutes an abuse of power or conduct which is oppressive, unfairly prejudicial or unfairly discriminatory;
- Direct action against directors for breaches of their statutory duties and actions based on improper use of position by directors;
- Actions by minority shareholders to prevent the majority from acting in manner which is would constitute a fraud on the minority;
- Winding up the company on just and equitable grounds;
- Administrative relief for corporate misfeasance; and
- Negotiation resulting in one shareholder buying out the other’s shares for a price defined by the court if agreement cannot be reached.
In addition to specializing in shareholder agreement dispute resolution, we also provide the most cost-effective results in the quickest time possible through the use of alternative dispute resolution, including:
- Arbitration – an arbitrator is appointed by the court or by the parties if they both agree.
- Mediation – an independent mediator is appointed.
- Negotiation – one of the best methods of coming to an agreement.
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Our Sydney Shareholder Disputes Lawyer Team
Christopher Chang
Chris was originally admitted as a solicitor in England & Wales and worked in London for an award winning and highly regarded firm established in 1881.
Tass Angelopoulos
Tass is a specialist employment lawyer with over 30 years experience. He has been a solicitor, a barrister and an industrial advocate.
Rebecca Campbell
Rebecca is a Senior Lawyer practicing in commercial and civil litigation.