Find Partnership and Shareholder Disputes Lawyer

Find Partnership and Shareholder Disputes Lawyer

Partnership and Shareholder Disputes

Whenever there are multiple people involved in a business it is inevitable that a situation will arise that leads to an ideological difference. Whether it is a branding decision, terms of incorporation, or a core change in business practices, these conflicts will rise and fall over the course of any business’ lifetime. The two most common types of dispute in high-level business transactions are partnership disputes and shareholder disputes.

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Maintaining Smooth Operation Through Conflict

Fundamentally, partnerships and shareholder disputes address the same question: what can a stakeholder in a company do when the company is not performing as intended. While both types of disputes answer this question, how they answer it and why it is being asked can vary depending on whether the dispute is with a business partner, or a shareholder.

Partnership Disputes

Partnerships are often the more involved types of business dispute. A partner likely has some amount of vested interest in the goings on in a business and will subsequently be more personally invested in getting their way. Whatever the reason for a partnership dispute, there are a few options that vary in complexity and severity.

The most amicable form of partnership dispute resolution is mediation or arbitration. This process asks an impartial third party to review the facts and make a decision in favor of one party or another. Another way to settle a partnership dispute is simply to buy out the disputing member’s interests. This can be done voluntarily if the partner wants to leave the company, or it can happen forcefully through what is known as a “freeze-out merger.” A freeze-out merger occurs by having a majority of the shareholders form a new company without the disputing minority, then merging the companies and dismissing the disputing members. This does result in the disputing members receiving compensation for their shares, but it also expels them from any leadership roles they may have held. The most expensive way to resolve a partnership dispute is through litigation. This could be because of misconduct, a freeze-out situation, or a breakdown in communication that leads to litigation being the last viable option for conflict resolution.

Shareholder Disputes

Shareholder disputes are the more detached form of business dispute relatively speaking. Oftentimes a shareholder is simply an investor who is unhappy with the direction of the business. This could be because the business is not profiting in the way that the investor wants, or it could be because of a previously hidden practice that the shareholder found unethical or distasteful. Regardless of why the dispute is occurring, there are three major solutions: mediation, buyout, and litigation.

Mediation involves the shareholder and the offending party sitting down in front of a third party and hammering out a solution. If that doesn’t work, then the shareholder may be offered a buyout in which the company purchases the shareholder’s stake in the company and allows the shareholder to leave the company. In the event that mediation fails and a buyout is unfeasible, perhaps because the shareholder feels that their shares were devalued in some way, then the shareholder can file a lawsuit to seek the damages that they feel that they deserve.

Keeping Business Booming

If you are engaged in a partnership or shareholder dispute, you will need the help of an experienced employment law attorney. An employment lawyer can use their experience and expertise to represent your interests and get you the results you need for the lowest overhead costs.

In order to achieve this best outcome, however, you will need an attorney who has the expertise and resources to take your case all the way. That’s why you should contact Attorney at Law. By partnering with AAL, you will be able to avoid slogging through the quagmire of unscrupulous lawyers looking to exploit your case.

At AAL, we only partner with the best firms in your area, helping you find the best attorney for your case. Don’t wait, contact AAL today to be matched with skilled and experienced attorneys in your area who practice business law.


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Partnership and Shareholder Disputes Frequently Asked Questions

1. What are partnership and shareholder disputes?

Partnership and shareholder disputes are two broad categories of conflict that arise within a business. What partnership and shareholder disputes have in common is their basic premise: an individual with a personal and potentially controlling stake in a company is in conflict with someone in charge of the company’s operation. 

Partnership disputes are the more even-footed of these disputes as a partner with either have a plurality in company stock or potentially be a high-ranking or founding member of the company. By contrast, shareholder disputes can be more detached, though no less fervent, often raised by an investor who is unhappy with the performance of their investment in a company.

2. How do I resolve a partnership dispute?

There are a number of ways to resolve partnership and shareholder disputes. Common to both forms of dispute is the option for arbitration or mediation. This is a voluntary form of problem-solving that allows individuals to sit down and discuss their issues in front of an impartial mediator. 

In more severe cases, there may be a litigatory solution. Litigation may occur over some impropriety such as fraud or deceptive practices, or it may simply be a solution when voluntary pathways have field or are refused. 

3. What kind of lawyer can help me with partnership and shareholder disputes?

The best attorney to help with partnership or shareholder disputes is a business law attorney. While some disputes may end up in court before a judge, many of these issues will be resolved by carefully examining and interpreting the articles of incorporation, the partnership agreement, or the shareholder agreement. An experienced business law attorney can find solutions that don’t involve a lengthy court procedure, whether that is a freeze-out merger, a buyout, or other non-litigatory solution.

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