Director and Shareholder Disputes

Disputes between directors and shareholders are commonplace and arise for a number of reasons including failures of individuals to comply with their obligations, performance issues relating to directors or breach of directors’ duties or minority shareholder disputes.

These kinds of disputes commonly arise in small, family-owned businesses where the directors and shareholders are often the same people.  Disputes in those circumstances are often complicated by the fact that the parties involved may be shareholders, directors and employees – or some combination of the three – and the various duties owed to and by each.

Breach of directors’ duties

Directors have statutory duties under the Companies Act 2006, which require them to:-

  • to act within their powers;
  • to promote the success of the company;
  • to exercise independent judgment;
  • to exercise reasonable care, skill and diligence;
  • to avoid conflicts of interest;
  • not to accept benefits from third parties; and
  • to declare an interest in a proposed transaction. 

Where a director has breached their duties, the company may have a claim against them, and the ability to remove them as a director.  Whether you are a director and the company is threatening proceedings against you, or a company with concerns regarding your directors’ conduct, Allan Janes can help.  We have a wide range of experience bringing and defending claims under the Companies Act.

Minority shareholders action

In some companies, usually family businesses, commonly referred to as quasi-partnerships, shareholders have a legitimate expectation that they may be involved in the day-to-day running of the company.  However, this can be difficult for minority shareholders who do not have the voting power to direct how the company should be run and can find themselves excluded from the company or with serious concerns regarding the management of the business by the majority shareholders.  In those circumstances, minority shareholders may have cause to bring a minority shareholders’ action under the Companies Act 2006.

Our lawyers have expertise in bringing and defending minority shareholders’ actions in the High Court.  We recognise that it’s more than just business, and handle matters considerately and sympathetically.  We will always attempt to settle matters without the need to resort to litigation, however where litigation cannot be avoided we are tenacious in achieving the best possible result for our clients.