Shareholders of a company have rights. When businesses start out everyone involved gets on well and are focussed on promoting the success of the new venture or newly acquired business. Various investment rounds may take place.
But it is a fact of life that all commercial relationships end at some point, that is certain.
We specialise in assisting businesses and business owners to extract themselves or others from their company or commercial relationship with as much value as is reasonably achievable. This is not always an amicable process.
We often advise in situations where a company shareholder has been treated unfairly or their rights have been unfairly prejudiced and they want out of the company. In situations such as that, we advise in relation to orders being sought from the Court for remedies to right the wrongs done to that shareholder.
Remedies might include the majority shareholders being ordered to buy out the prejudiced shareholders shareholding or the Court might impose some form of management conditions upon the company. In some circumstances, the company may simply be wound up.
Examples of how shareholders can be unfairly prejudiced might be:
- Where a shareholder has been excluded from the management of their company
- Where a company is not paying sufficient dividends to a shareholder
- Where the relationship between the shareholders has broken down because of some form of wrongdoing
- Misuse of company property
- Misuse of company funds
- Mismanagement of the company
- Paying excessive remuneration to directors
- Diluting the minority’s shareholding
- Deadlock of company management