We assist in drafting comprehensive shareholder agreements and provide expert guidance in resolving shareholder disputes. Our aim is to protect our clients’ interests, maintain business continuity, and find equitable solutions to complex ownership issues.
Overview
Shareholder agreements and disputes are critical aspects of corporate governance in Australia, particularly for private companies and closely-held businesses. While the Corporations Act 2001 provides a basic framework for company operations, shareholder agreements allow for customised arrangements that reflect the specific needs and dynamics of the business and its owners.
Shareholder disputes can arise from various issues, including disagreements over business strategy, dividend policies, management decisions, or allegations of oppression of minority shareholders. These conflicts can be particularly challenging due to the often personal nature of relationships in closely-held companies and the potential for disputes to significantly disrupt business operations.
Recent legal developments, including evolving case law on minority shareholder rights and the introduction of crowd-sourced funding legislation, have added new dimensions to shareholder relations and potential areas of conflict.
Our approach
We take a proactive and tailored approach to shareholder matters. When drafting shareholder agreements, we work closely with our clients to understand the unique dynamics of their business and shareholder relationships. We craft agreements that clearly define rights, obligations, and procedures for key issues such as decision-making, share transfers, dispute resolution, and exit strategies.
In dispute situations, our first priority is to understand the full context of the conflict, including the legal, commercial, and personal dimensions. We then develop strategies aimed at resolving disputes efficiently while preserving business value and relationships where possible.
We are experienced in various dispute resolution methods, including negotiation, mediation, and, when necessary, litigation. Our approach often involves seeking creative solutions that address the underlying interests of all parties rather than focusing solely on legal positions.
For matters that proceed to court, we provide robust representation, leveraging our deep understanding of corporations law and shareholder rights. Throughout the process, we maintain clear communication with our clients, providing strategic advice on their options and potential outcomes.
Representative experience
- Drafted a comprehensive shareholder agreement for a tech start-up, incorporating provisions for staged investment, vesting schedules, and a detailed exit mechanism, providing a solid foundation for the company’s growth.
- Successfully represented a minority shareholder in oppression proceedings, securing a court-ordered buy-out at a fair value, enabling our client to exit the company on favourable terms.
- Negotiated a resolution to a deadlock between equal shareholders in a family business, implementing a new decision-making structure that allowed the business to continue operations smoothly.
- Advised a group of shareholders on their rights and options in response to a hostile takeover attempt, developing a strategy that ultimately led to improved offer terms.
- Mediated a dispute between founding shareholders over intellectual property ownership, reaching an agreement that fairly allocated rights and ensured the company’s continued access to critical technology.
- Assisted a company in updating its shareholder agreement to accommodate a new investor, balancing the interests of existing shareholders with the requirements of the incoming capital.