Business disputes and business litigation can arise for many different reasons, and it is important to understand your options when a dispute arises. One common kind of dispute that can ultimately lead to business litigation is a shareholder dispute. Whether you are in the early stages of starting a new business and need to take measures to avoid a shareholder dispute, or you are facing a shareholder dispute in your current company, it is critical to understand what shareholder disputes often entail and what you may be able to do to resolve a dispute. Our Santa Fe business litigation attorneys are here to assist you.
What is a Shareholder?
When you are thinking about starting a new business or you have limited experience with different business structures, it is important to understand what a shareholder is in order to understand how a shareholder dispute can arise.
A shareholder is either a person or an entity that has purchased shares of a company’s stock. Accordingly, a shareholder has a portion of ownership in the company itself as a result of buying the company’s stock. Shareholders have rights and receive profits, but they also have control over certain aspects of the company, including financial and operational issues. Minority shareholders, which is a term that usually refers to shareholders that have fewer than 50% of the voting shares of the company, do not have control over the company in the way that majority shareholders (i.e., those with 50% or more of the shares in the company) do.
How Do Shareholder Disputes Happen?
There are a variety of ways in which shareholder disputes can arise, including legal matters concerning breach of contract claims, fiduciary duty concerns, or minority shareholder issues. The following are some of the more common types of shareholder disputes that come up:
- Breach of shareholder agreement: Shareholder agreements usually clarify how the company will operate and how it will be managed, and they will usually explain what kinds of company decisions will require approval from the shareholders. If a shareholder breaches the terms of the agreement, it may be necessary to work with a Santa Fe business litigation.
- Fiduciary duty concerns: Certain types of shareholders owe a fiduciary duty to one another. When a shareholder has concerns about another shareholder’s or group of shareholders’ dealings, a dispute can arise.
- Compensation disputes, which can arise under a variety of circumstances in which one or more shareholders do not believe that they are being compensated appropriately or fairly, especially employee shareholders.
- Minority shareholder issues, which are those in which minority shareholders allege that their rights have been violated by majority shareholders.
If your company is dealing with a shareholder dispute, it is important to know that there may be multiple ways to resolve it. You may be able to resolve a dispute through a form of alternative dispute resolution (ADR), or it may be necessary to turn to litigation. Our Santa Fe business litigation lawyers can assist you with a range of methods.
Contact a New Mexico Business Litigation Lawyer
If you have questions about a shareholder dispute or require assistance, one of our experienced Santa Fe business litigation lawyers can speak with you. Contact Slate Stern Law today to learn more about your options.