Insights from “The Traitors”
- Corporate Law
- 7th Feb 2024
In the corporate world, safeguarding your business from potential ‘traitors’ within is paramount. Drawing inspiration from the TV show “Traitors,” we explore how focusing on protective measures like shareholder agreements and well-crafted articles can protect your business against internal threats. The Threat of Shareholder Disputes: Disputes among shareholders pose a substantial risk to […]
By Amelia DentonMLP Law
In the corporate world, safeguarding your business from potential ‘traitors’ within is paramount. Drawing inspiration from the TV show “Traitors,” we explore how focusing on protective measures like shareholder agreements and well-crafted articles can protect your business against internal threats.
The Threat of Shareholder Disputes:
Disputes among shareholders pose a substantial risk to businesses, jeopardising shareholder value, steering business direction astray, and tarnishing reputation. Recognising the diverse reasons behind such disputes is crucial for proactive resolution.
Types of Shareholder Disputes:
Shareholders falling out
General conflicts of interest
Disagreements over the company’s direction or development
Lack of transparency regarding financial affairs
Perceived breaches of directors’ duties
Performance issues by shareholders or directors
Prevention through Communication and Agreements:
Effective communication, with a focus on aligned expectations, is pivotal in preventing disputes. Shareholders’ Agreements are essential tools for defining business direction, aligning stakeholders, and clarifying rights, obligations, and expectations within the company.
Understanding Shareholders’ Rights:
In the absence of a specific agreement, conventional methods for addressing disputes include general meetings, legal correspondences, and court proceedings. Shareholders inherently possess rights such as inspecting directors’ service contracts, bringing personal claims against the company, initiating derivative claims, filing unfair prejudice claims, and seeking court intervention for winding up the company when deemed just and equitable.
Key Role of Shareholders’ Agreements:
Anticipating and addressing potential disputes within shareholders’ agreements and articles of association is pivotal. Proactive measures in these documents can save time and resources, ensuring swift resolution without detrimental impacts on the company.
Seeking Professional Guidance:
To seek advice on shareholder disputes, connect with our Corporate team at 0161 926 9969 or via email at firstname.lastname@example.org. Taking cues from “Traitors” reminds us of the importance of vigilance and preparedness. By protecting your businesses with robust agreements and proactive communication, you can navigate for the challenges that may arise from within.
About the expert
Stephen is the Owner of MLP Law and leads our Commercial, IP and Dispute Resolution teams which provide advice on all aspects of the law relating to mergers, acquisitions, financing, re-structuring, complex commercial contracts, standard trading terms, share options, shareholder and partnership agreements, commercial dispute resolution, joint venture and partnering arrangements, IT and Technology law, Intellectual Property, EU and competition law, Brexit and GDPR.
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