Shareholder disputes can be time-consuming and can lead to negative publicity. There are a number of ways to mitigate the risk of such a dispute arising including (i) maintaining a clear and comprehensive Shareholders’ Agreement, (ii) making sure all the directors understand their duties under the UK Companies Act 2006 (iii), emphasising regular and transparent communication about the company’s performance and holding regular board and shareholder meetings and (iv) making sure the company has a robust and fair dispute resolution mechanism.
It is advisable to seek advice on day-to-day best practice in running a business and if a dispute arises it is essential to obtain specialist legal advice at the outset.
Learn More: UK Founder Series: Navigating Shareholder Disputes in the UK