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Shareholder Disputes:

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Shareholder disputes can occur in both civil litigation proceedings and commercial litigation proceedings. They may occur in disputes relating to voting in meetings or dividend distribution, for different types of corporations. These can be commercial in nature (for corporations the purpose of which is to trade for a profit), for charitable organisations (non profits) or various express trusts (such as family trusts). The overlap between various different legal practice areas that is apparent in shareholder disputes means that appropriate shareholder legal advice should be taken from a civil litigation solicitor who has commercial experience, or from a commercial litigation solicitor who has civil experience.

Civil lawyers who have had exposure to commercial matters will usually be able to assess the particulars of the shareholder dispute in greater detail. Likewise, commercial lawyers who have had carriage of civil matters could have the added advantage of noticing options and alternatives that a litigant in a shareholder dispute may wish to investigate or pursue. The corporate law team at Navado is networked with other legal teams which creates a symbiotic relationship with other litigators in the law firm. Areas such as family law, contract law, property law, taxation law, bankruptcy, insolvency and probate, all play a role and often are intertwined within the ambit of a complex shareholder dispute, depending on the facts of each case.

This creates a professional dynamic which can be exploited on a case by case basis. As each legal team works with the other in assessing the parameters of a shareholder dispute and the relevant legal principles involved and the corporate synergy ensures that the legal advice provided to clients will be holistic. Shareholder disputes at Navado are treated with the highest standard of detail and all investigations of fact are conducted diligently before legal advice is provided to the client.

Some of the areas that are explored as a matter of course include:

  • Types of shares:
    • Classes and their meaning,
    • Voting and non-voting,
    • Equity and non-equity,
    • Other special classes.
  • Acquisition of shares;
  • Issuing shares;
  • Calling on shares;
  • Shareholder minority oppression;
  • Fraud on the minority shareholder;
  • Legal issues relating to buying out;
  • Hostile takeovers;
  • Takeovers by agreement;
  • Procedures in meetings
    • Quorum,
    • Resolutions and Motions,
    • Decisions ultra vires,
    • Records and Minutes.
  • Access to finance and auditing;
  • Cross-practice area legal issues:
    • Contract law (drafting agreements for the issue and transfer of shares, interpretation of provisions relating to the powers associated with certain classes of shares)
    • Family law (effect of share acquisition or sale on family law proceedings),
    • Trust law (effect on tax liability and family law proceedings),
    • Taxation law (liabilities arising from the sale and purchase of shares),
    • Bankruptcy and Insolvency law (how shares are dealt with in situations of winding up, administration or liquidation)

The interpretation of the articles of association or constitution of the corporate entity may be essential in dealing with shareholder disputes. It is important that all transactions be conducted in accordance with all legal provisions. The principles of contract law and corporate law will usually apply in dealing with shareholder disputes, whether or not they lead to litigation or Court processes.

If you require legal advice on your shareholder dispute matter, you may wish to contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au and make an appointment to see one of our solicitors. 

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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.

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