Shareholder Disputes

While it may be an advantage to have partners in business to shoulder the burden of operations - at Granville Law Group we have seen time and time again – too many voting shareholders, especially without a Shareholder's Agreement, is likely to be bad for business and corporate administration:

  • Administration – simple annual shareholders' resolutions may become an ordeal because all of the voting shareholders must sign. If you cannot collect all the signatures, you will have to call a meeting to pass resolutions by majority. For that meeting you will have to prepare financial and corporate documents, rent a room and take the time to hold it. Another example is waiving the legislative requirement that a company have an auditor – the waiver must be unanimous and done every year. Without the unanimous waiver the company financial statements must be audited, which can be a substantial expense.
  • Business – if other shareholders have too many votes, your vision for the company may be challenged, even if you remain a majority shareholder. Any problems most likely will not arise at the beginning. They will certainly come up if the business does not go as planned. They also can arise when a minority shareholder decides that they know better and want to get involved in company management.

There are also "reasonable expectations" of minority shareholders which are protected by what is known as the "oppression remedy" in the corporate legislation, provided the court determines their expectations were, indeed, reasonable. If this occurs, it may entitle minority shareholders to remedies that are costly for the company.

We Can Help You Mitigate The Costs Of Disputes Before And After They Arise

Even an excellent Shareholders' Agreement may not save the day completely, but it will make a conflict resolution easier by providing mechanisms for it, including step-by-step procedures for the departure of unhappy shareholders, determination of and resolving disputes about share prices for a buyout. Nonetheless, you will do well if you respect your fellow shareholders and solve problems before they become litigious or sever relationships before they take you to court.

Granville Law Group lawyers will assist with negotiations with unhappy shareholders and structure and implement settlement that will leave all the parties if not entirely happy then at least content.

Discuss Your Matter With Our Legal Team

Schedule a Free, 30-Minute Consultation. Come into our office and tell us about your situation. We will tell you how we can assist you. Call Granville Law Group at 604-757-9385 or arrange a meeting using our online form.