Shareholder Disputes

A Shareholders’ Agreement is a contractual agreement between the shareholders of a company, being typically small private companies. 

These agreements are often used to set out specific rights and obligations of the parties that govern the relationship between the shareholders.  When in place shareholders should be required to enter into the Shareholders’ Agreement as a condition of a sale and purchase of shares in the company.

Shareholders’ Agreements commonly contain clauses dealing with:

  • deadlock provisions designed to break a deadlock among shareholders as to the management of the company;
  • alternative dispute resolution provisions to assist shareholders to resolve disputes without recourse to legal action;
  • pre-emptive rights provisions, such as the right of first refusal if a shareholder wishes to sell his or her shares or the requirement of the consent of the Board of Directors;
  • provisions setting out triggering events requiring the transfer of shares to existing shareholders, such as the death of a shareholder, insolvency events, serious breaches of the Shareholders’ Agreement or loss of required certification etc.; and
  • share valuation methods.

Rowe Bristol Lawyers has extensive experience in advising clients with respect to Shareholders’ Agreements, including:

  • drafting a Shareholders’ Agreement as instructed by the client and accepted by the other parties;
  • considering the terms of the Constitution of the company (if any) and advising as to inconsistencies;
  • advising as to the amendment of the Shareholders’ Agreement from time to time; and
  • advising and representing the client as to disputes that may arise with respect to the Shareholders’ Agreement.

If you require legal advice in relation to Shareholders’ Agreements, pleasedo not hesitate to contact us to arrange a meeting so that we may consider your specific circumstances.

The above information is provided as general information only and should not be relied upon as legal advice.  The accuracy of this information may have changed from the date when it was published. 

1[2014] NSWSC 78