Shareholders can find themselves in dispute when one wishes to exit the business, the working relationship has broken down, or because another shareholder simply isn’t pulling their weight.
Here’s a common chain of events when you’re involved in a shareholder dispute.
You and your fellow shareholder might have started out as friends, so you might first try to liaise with them direct, informally.
It’s great if this approach works, but you can’t always resolve shareholder disputes yourself. Perhaps you’ve become frustrated because your co-shareholder keeps changing their mind, or you find you just can’t reach agreement about what to do.
So you might agree to try bringing in a mediator.
They can sometimes help shareholders get out of sticky situations, but mediation doesn’t always work either. In that case, you have to bring in heavyweight expertise.
“OK,” you decide, “I need a shareholder dispute solicitor.”
So you turn to your usual company solicitor for assistance.
There are two problems with that.
First, if your company solicitor drafted the Articles of Association, or – more importantly – if they wrote the original shareholder agreement, it will be a conflict of interest for them to sort out a dispute between the different shareholders.
Second, if your company solicitor does not have any experience of shareholder disputes, they will not be the right person to help you.
Because when you’re decorating your house, you probably don’t ask your plumber to put the wiring in. Plumbers and electricians are both tradespeople, but they have different skillsets.
It’s the same with solicitors. Not all solicitors have the same expertise.
What you need is an independent solicitor with the right experience.
So where do you begin to look for a shareholder dispute solicitor?
You might do a Google search, you might click ‘Find a solicitor’ on the Law Society website, or you might ask other shareholders to recommend someone they know.
And when you’ve drawn up a shortlist of shareholder dispute solicitors, how do you decide which one to instruct?
Here are some of the things to look for:
- Have they worked on similar shareholder dispute cases? The facts might not be the same, and the company documents almost certainly won’t be, but any shareholder dispute solicitor worth their salt should be able to prove they have come across a similar situation before.
- Have they got experience of dealing with businesses of all shapes and sizes, from PLCs to SMEs? You need a shareholder dispute solicitor that understands your business.
- Will the shareholder dispute solicitor listen patiently to your complaint, and then provide you with a strategy and range of options that have been well thought through?
- Do they cover your geographic area? If you are a company incorporated in England or Wales, you need a solicitor who understands UK law.
- Are they Lexcel-accredited? This is the mark of a professional firm.
As you can imagine, Summit Law ticks all these boxes.
If you’d like more information on how to choose a shareholder dispute solicitor, please call us on 020 7467 3980. We’ll be happy to help.