With shareholders controlling the direction of corporations in Canada, shareholder disputes that arise may be determinantal to the bottom line of the company. Having shareholders who disagree on the current or future affairs of an organization can lead to wasted resources, chaos among the board and officers of the company, and a general lack of direction.
We assist shareholders with crafting shareholder agreements that clearly define dispute resolution processes, so that shareholders can feel assured that any disputes will be resolved quickly, efficiently, and with the least distribution to the business as possible.
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.
Shareholder disputes typically involve a four (4) stage process, where shareholders typically undergo negotiation, mediation, arbitration, and finally, litigation. At any one of these stages, shareholders should seek independent legal advice, since failing to do so may negatively impact the organization, or even worse, the shareholder personally.
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. Our lawyers understand the intricacies of
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 lawyers provide a no-nonsense approach to providing practical and straightforward advice which can assist corporations in ensuring that their processes, agreements, and policies surrounding shareholders and any possible disputes are clearly identified. Not only does this assist the company in avoiding liability, it ensures that the corporation is run efficiently with clear expectations clearly defined.
When a shareholder has a complaint, they may apply to the court for:
- 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 both the claimant and the corporation.