BUSINESS AND COMPANY DISPUTES (COMMERCIAL LITIGATION)
Where a business or company has several owners, directors, shareholders or partners, it is inevitable that disputes may arise in relation to the business, such as investments, profits or how the business should move forward.
Examples of Disputes
Common examples of disputes arising within a business or company include:
- The establishment of a company;
- The running of a company (appointment, remuneration and removal of directors);
- Minority shareholder concerns;
- Profit distribution;
- Company taxation;
- Lessor disputes;
- Supplier disputes & Lender disputes;
- The provision of personal guarantees;
- Financial difficulties;
- Insolvency; and
- Winding up
A Shareholders Agreement is a legally binding contract between the shareholders and directors of the company and governs the relationship between them.
A well-drafted Shareholders Agreement should cover the process of how the business should be run, how areas of the business are regulated, and how any dispute should be resolved or attempted to be resolved. To avoid the need to commence proceedings in Court, the Agreement will often provide that the parties engage in alternative dispute resolution.
Alternative dispute resolution would be highly beneficial for all parties involved, particularly if the parties wish to remain amicable and professional throughout and after the dispute.
Absence of Shareholders Agreement
In the absence of a Shareholders Agreement, disputing parties should look to the Company Constitution, which acts as a legally binding contract between the company, its directors and members. The Constitution puts in place rules for the process and mechanisms in place to resolve an internal dispute.
Initiating Court proceedings
Depending on the circumstances and seriousness of the dispute, a party may consider commencing proceedings at Court to seek compliance with the terms of the Constitution. Initiating proceedings is a costly option and it is strongly recommended, particularly given that the parties are in a business or company together, that other mechanisms and pathways are explored prior to initiating proceedings.
Commercial Litigation Experts
If you are involved in a dispute and need experienced lawyers, contact us today.