Planning Ahead Can Make Shareholder Disputes Easier

When people start a business, a great amount of time and detailed work are given to developing a business plan and growing the business with marketing efforts. However, the same amount of attention to detail should also go into understanding shareholder issues.

Disputes with shareholders can often be caused by employment issues and ownership matters. Sometimes shareholders need to part ways and sort out each party’s rights and obligations, which can lead to expensive disputes between shareholders and corporations. When these decisions are planned out ahead of time, it can save all parties time and money.

Sometimes the controlling party needs to exclude the minority shareholder from the business, and parting ways with a shareholder has a tendency to devolve into a lengthy dispute and legal battle. When all options are discussed and written in contracts prior to the decision, certain risks can be avoided.

The majority shareholder has a duty to deal fairly and honestly with the corporation and fellow shareholders. When minority shareholders do not feel like they are being treated fairly while being removed from the company, they may bring a freeze-out or squeeze-out claim against the company. This is basically stating that the minority shareholder believes that company is breaching their fiduciary duty.

If your company is at one end of a legal battle because a minority shareholder feels like the bylaws were violated and that their rights were oppressed, you should talk with a skilled business litigation attorney to find out how to protect your business from an expensive legal battle.

Please contact the Voss Law Firm and speak with a knowledgeable Texas business litigation lawyer in a free, no-obligation legal consultation to find out more about your rights at (866) 276-6179. You can also request a complimentary copy of attorney Bill Voss’s book, Business Disputes – Critical Information for All Business Owners. Download this book for free today.