Shareholder disputes occur when there is a difference in vision when it comes to the total company vision as well as personal differences, leading to friction between shareholders. Minority shareholders find themselves in an oppression position or in an alternate position where they cannot exercise their rights under their shares.
Our litigation lawyers assist in litigating those disputes. In the process, you will play part in the negotiations and be in the driver seat to allow for the smoothest and best possible result.
Shareholder Disputes: What Are Shareholder Rights?
The three basic rights of shareholders include the right to vote at valid shareholders’ meetings, the right to attend shareholders’ meetings, and the right to have access to accurate and complete information regarding the corporation’s affairs.
However, shareholders rights do not stop there. Shareholders are entitled to certain rights within the Ontario Business Corporations Act and the Canadian Business Corporations Act as well as in a Unanimous Shareholder Agreement, if one exists.
How Are Shareholder Disputes Resolved?
Shareholder disputes, like all litigation, would require letting the other side know of your issues. This is often done in the form a demand letter. If the response is conducive to negotiations, then a settlement may be possible towards which all the parties can work. However, in some instances, the parties want their day in court. In those scenarios, you want a lawyer who can help tackle the issues in a way that still protects you against legal costs.
Mediation is a good place to resolve some or all the issues. However, some matters may require discoveries (examination for discoveries) and full-blown litigation to compensate the shareholder for oppressive behaviour by other shareholders.
How Important Is A Shareholder Agreement?
Shareholder agreements apply to the owners, or shareholders, of a corporation. Shareholder agreements typically outline how the company is to operate, and what the rights and obligations are of the shareholders.
Since most companies have varying risks and objectives depending on the nature of this business, shareholder agreements are usually custom and consider the details specific to that company. Having a well drafted shareholder agreement can assist with clarifying rights, processes, and dispute resolution steps in case there are shareholder disputes or disagreements.
However, many companies do not have shareholder agreements – so the Ontario Business Corporations Act and the Canadian Business Corporations Act will apply. Our lawyers know what you are going through, and we know how to help you, not only in the legal arena, but in getting a true financially-savvy resolution to your issues.
Shareholders can have various disputes when it comes to several aspects of the corporation such as:
- Sale or ownership of business
- Dissolution of business
- Breaches of fiduciary duties
- Share price and valuation
- Shareholder agreement violations.
Our litigation lawyers provide a no-nonsense approach to providing practical and straightforward advice and litigation help to get results.
What Are Shareholder Claims?
When a shareholder has a complaint, a Claim to the right court may ask for various remedies, including:
- Application for a compliance order
- Inspection or an investigation
- Appointment of an auditor
- Financial disclosure
- Derivative action.
At Achkar Law, we can assist with shareholder claims whether they are against a director or officer of the corporation, or against a fellow shareholder. We can help avoid costly legal battles by finding solutions that result in a favourable resolution to the shareholders.
If you require representation or seeking to clarify your rights with respect to shareholder agreements or disputes, our team of commercial litigation lawyers would be happy to help you navigate your matter. Contact us at 1-800-771-7882, or email [email protected] and we would be happy to assist.